英文虎报发表了一篇题为 "美国新税务条例的警示" 文章（2016年12月5日），文中引述了德勤中国税务与商务咨询协同主管及企业并购服务全国领导人叶伟文先生的评论。
Warnings on US tax rules
Hong Kong and mainland companies with subsidiaries in the United States might have to re-capitalize them after the US Treasury Department and the Internal Revenue Service finalized new rules relating to American units of foreign firms.
Those rules, under Section 385 of the Internal Revenue Code, recharacterize certain debt instruments issued to related parties as equity for US federal income tax purposes.
When the new rules kick in in 2018, the debt financing of the US units of Hong Kong and mainland companies will no longer enjoy the tax benefits they used to have, said Patrick Yip Wai-man, Deloitte China deputy tax managing partner. He said the choice of debt or equity as financing tool will become more critical for all outbound transactions into the US as the new rules are finalized.
As the US represents a huge market and since many US retailers do not want to bother clearing customs and warehousing, many Hong Kong and mainland companies have set up subsidiaries in the States, said Yip.
"The question is when you set up subsidiaries in the US, do you capitalize them using all equity or part stock and part debt? Let's say you capitalize your US unit with all equity and you make a US$100 (HK$780) income. That income would be subjected to a federal income tax of 35 percent and a state income tax of let's say another 10 percent. After that, you're left with only US$55," he explained.
If this US$55 is to be paid to its parent company in Hong Kong or China, that would be subject to a 30 percent withholding tax. That means, the company will be able to pocket US$38.5 only.
"In another situation, you can capitalize your US unit partly with stock and partly with debt. Let's say your subsidiary makes US$100 and in an extreme situation it pays out all of the US$100 as interest. That entire amount will only be subjected to a 30 percent withholding tax and this means the unit will get back US$70," said Yip.
The two scenarios above illustrates why many companies favor capitalizing their units in the US with debt instead of straight capital.
"If you are the US government, you will not be happy about it as companies are basically stripping income from the US by way of interest," said Yip.
With the IRS due to implement new rules under Section 385 from January 2018, debt may be regarded as equity for US tax purposes. The new regulations have expanded the ability of the IRS to recast debt into equity.
Yip said the new rules have stirred up much concern in the local business community as many companies favor using debt to capitalize their US subsidiaries.
For debt to remain classified as debt for tax purposes, under the new rules US units of Hong Kong and mainland firms will need to show proof, such as loan agreements, that they can pay back debt that has been incurred.
"If you have intercompany financing unsupported by any documentation, such as loan agreements with fixed repayment terms and a fair interest rate, it is very likely those loans will be considered as equity," Yip said. He said the new regulations will also have an impact on merger and acquisition transactions.
A case in point is a company, which took out a loan from a bank in Hong Kong and then lent the money to its US unit for the purpose of buying assets in that country. Under the new regulations, the US unit may be asked if it has the ability to pay back its parent.
If the loan is not covered by a collateral or documentation, the Hong Kong or mainland company will run the risk the loan to its US unit will be considered as capital rather than as debt. In the latter scenario, the internal rate of return of the M&A transaction may be adversely affected.
Yip said local and mainland companies need to scrutinize the new tax regulations to ensure they have proper documentation, credit analysis and other documents that will show that their US units won't have difficulties availing of tax benefits in the US that they wish to enjoy.
Meanwhile, Deloitte data shows that Chinese outbound M&A deals in the US amounted to about US$42.60 billion (HK$332.28 billion) between January and September this year. The amount represented 24.2 percent of total Chinese outbound investments during the period and it was up from 15.7 percent for the whole of last year.
Yip believes the US will remain one of the top destination of mainland firms for asset acquisitions, amid a weak yuan.
(Source of the article: The Standard - http://www.thestandard.com.hk/section-news.php?id=177058&fc=1)