Luxury Brands in China: Part V
Tax and regulatory issues
By Nick Debnam & George Svinos, KPMG
The process of importing, distributing and selling luxury goods in China raises further challenges for companies, including a number of difficult questions regarding tax treatment, customs duty, logistics and the transfer of intellectual property.
Customs duty, import VAT and consumption tax can all be charged on luxury goods imported into China. The ability of brands to mark up their goods at dramatic premiums can also prove difficult to explain to tax authorities when the time comes to file income tax returns. Companies producing or trading luxury items need to understand how to avoid unnecessary or overlapping burden of tax and other duties. For example, VAT and business tax should in theory be mutually exclusive, since both are turnover taxes. Read the rest of “Luxury Brands in China: Part V” or post a comment
