AMT Patch to Delay Tax Filling For Some Americans

The IRS expects to begin processing returns for the vast majority of taxpayers in mid-January. However, as many as 13.5 million taxpayers using five forms related to the Alternative Minimum Tax (AMT) legislation will have to wait to file tax returns until the IRS completes the reprogramming of its systems for the new law. The IRS has targeted Feb. 11, as the potential starting date.

Only Last week, the law makers approved a one-year repair, or "patch," of the AMT, which had threatened to increase taxes on about 20 million middle- and upper-middle-income households. It is a good news that they finally passed the patch, but it is so late that IRS has not enough to adjust their systems. However, probably only a portion of the people is expected to be affected since many people won't file in the first four weeks. A little bummer for those who are expecting a refund, though.

For overseas Americans, however, due to the weakened US dollar, you may pay more tax even though your local income stays the same. Please consult with their professional tax advisor regarding any recent changes in tax law that may have a bearing on the calculations of Alternate Minimum Tax.

US Internet Tax debates

US consumers may have to pay an Internet access tax if the US decides on Nov 1 to lift the federal ban.

Currently the lines that provide Internet access in the US are virtually tax-free but this could change soon if local government has anything to say about it.

Within the industry the idea of imposing additional taxes on Internet access is extremely unpopular and organizations like Google, AT&T and Timer Warner have banded together to form a group called “Don’t Tax our Internet”.

Changing Internet usage has complicated the issue, threatening to derail an extension and raising the specter of local officials engaging in a land-rush-like race to enact new taxes for surfing the Web.

In the forthcoming weeks it will be interesting to see how this matter plays in the US and who will win out – US government or the industry players

China’s new corporate tax code to spur foreign investments

Tax rate to be cut to 25% from 33%

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China to offer industry-based incentives against the location-based system.

15% I-T rate will be applicable for high-tech, advanced tech enterprises.

Withholding tax exemption on dividends repatriated to foreign investors likely to go.

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China is set to strengthen its position as an attractive destination for foreign investments, including from India, with the country carrying out tax reforms and formulating a new corporate income tax code that comes into effect from January 1 next year.

China Foreign investment Tax information:

There are 14 kinds of taxes currently applicable to the enterprises with foreign investment, foreign enterprises and/or foreigners, namely: Value Added Tax, Consumption Tax, Business Tax, Income Tax on Enterprises with Foreign Investment and Foreign Enterprises, Individual Income Tax, Resource Tax, Land Appreciation Tax, Urban Real Estate Tax, Vehicle and Vessel Usage License Plate Tax, Stamp Tax, Deed Tax, Slaughter Tax, Agriculture Tax, and Customs Duties.

Compatriots from Hong Kong, Macao and Taiwan and overseas Chinese and the enterprises with their investment are taxed in reference to the taxation on foreigners, enterprises with foreign investment and/or foreign enterprises. In order better to encourage inward flow of funds, technology and intelligence, China provides numerous preferential treatments in foreign taxation, and has successively concluded tax treaties with 60 countries (by July, 1999): Japan, the USA, France, UK, Belgium, Germany, Malaysia, Norway, Denmark, Singapore, Finland, Canada, Sweden, New Zealand, Thailand, Italy, the Netherlands, former Czechoslovakia, Poland, Australia, Bulgaria, Pakistan, Kuwait, Switzerland, Cyprus, Spain, Romania, Austria, Brazil, Mongolia, Hungary, Malta, the United Emirates of Arab, Luxembourg, South Korea, Russia, Papua New Guinea, India, Mauritius, Croatia, Belarus, Slovenia, Israel, Viet-Nam, Turkey, Ukraine, Armenia, Jamaica, Iceland, Lithuania, Latvia, Uzbekistan, Bangladesh, Yugoslavia, Sudan, Macedonia, Egypt, Portugal, Estonia, and Laos, 51 of which have been in force.