Welcome to Herbert Smith Freehills’ new monthly private wealth industry updates in Asia.
Every month we survey a number of Asian jurisdictions for legal developments concerning trust and estate planning which are of interest to the private wealth industry, and provide a succinct summary in a table format. The jurisdictions covered in the updates are Hong Kong, Singapore, China, Taiwan, Japan, India, Malaysia, Indonesia, Thailand and the Philippines. We hope that these updates will prove to be a useful resource to keep private clients, business people, and lawyers abreast of legal updates in the region.
China takes further steps to establish a sovereign digital currency
Once launched, the Digital Yuan is due to replace cash in China. The plan is for the currency to be centrally controlled by the People’s Bank of China and for commercial banks to hold reserves at the bank for assets valued in Digital Yuan. Individual and commercial banking clients would then be able to hold digital wallets with the banks. Shenzhen has now been given the go ahead to pilot digital currency research and innovation to push the launch forward.
The Union Finance Minister Smt. Nirmala Sitharaman announces measures to boost the Indian economy
In a press conference on 23 August 2019, the Finance Minister proposed a number of economy boosting measures including that the recently announced tax increase to long and short term capital gains tax is to be withdrawn.
The Budget 2019 proposed an increase in tax for higher income earners which would, among other things, see short-term capital gains on sales of debt securities and off-exchange sales of equity securities be taxed at 42.74% instead of the current 35.88%. Tax on equity shares, units of equity-oriented funds, units of business trusts and transfer of derivatives for Foreign Portfolio Investors will now be exempt from the Budget 2019 tax proposal. The exemptions are applicable to both domestic and foreign investments.
The Finance Minister also announced that efforts will be made to simplify tax filing for individuals and combat harassment of taxpayers.
Indonesia plans to reform tax rules
In order to encourage foreign direct investment, corporation tax will gradually be lowered from 25% to 20% from 2021. Newly listed companies may also be subject to a lower rate of 17% for a five year period and it has been proposed that tax on dividend will be eliminated if the dividend is subsequently reinvested. In addition, the government will also look to reform VAT, income and general tax rules.
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