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Jingtian & Gongcheng

34/F, TOWER 3, CHINA CENTRAL PLACE, 77 JIANGUO ROAD, BEIJING 100025, CHINA
Tel:
Work +86 10 5809 1000
Fax:
Fax +86 10 5809 1100
Email:
Web:
www.jingtian.com
Beijing, Shanghai, Shenzhen

Lawrence Hu, Partner

Law firm partners and practice heads explain how their firms are adapting to clients' changing needs

Why did you choose taxation as your practice?

I graduated from Taxation College of Yangzhou University (now National Taxation College), which is the only one directly affiliated by State Administration of Taxation. It’s a great chance for me to learn taxation law and I had a strong passion for it. As a result, I chose taxation as my practice area.

Since most of the alumni of Tax College of Yangzhou University are working with tax authorities at all levels around China, we can frequently exchange information about taxation practice. Our similar educational background and the alumni’s identity make it easier for me to communicate with officers in the tax authorities. The information I obtained from the alumni is really useful and practical when serving my clients.

What are the contents of your tax practice?

Our tax practice includes:

  • To provide clients with tax services like consultation, review and planning on specific issues in their daily operations;
  • To provide comprehensive tax services for transactions (IPO, M&A, outbound investments and etc.), which include tax analysis and planning in every phases, including deal structuring, financing strategy, due diligence before the deal, negotiation and documentation of tax-related terms during the deal, business integration after the deal and so on;
  • To provide tax planning services on asset allocation, wealth inheritance and etc. for high net worth individuals and high income individuals;
  • To provide tax services for clients to apply for various kinds of favorable tax treatments;
  • To provide enterprises with transfer pricing services, including designing, documentation and defenses;
  • To provide services of tax dispute resolution for clients, including communication with tax authorities, representing clients in tax administrative reviews, administrative proceedings and criminal proceedings.
What representative cases would you like to share with us?

Case 1: One of my clients, a leading food enterprise, had a dispute with its Chinese partner in their Joint Venture. Since the dispute was really drastic, my client and its Chinese partner started to accuse each other of the tax compliance issues. My client engaged us and another accounting firm. However, we two firms held different opinions on a significant issue. Based on our understanding of the tax rules from the perspective of law, we considered that the client could be exempted from certain liability. Finally, the tax authority accepted our opinion. However, if the other accounting firm’s opinion had been accepted, the client would have borne a much heavier but unnecessary liability.

Case 2: One of my clients, a State-owned enterprise which was administered by the State-owned Assets Supervision and Administration Commission, is seeking to get listed in Hong Kong. The restructuring before its listing involves lots of appreciation of the land. If not handled skillfully, the appreciation of the land will be levied a heavy tax no matter whether the client will successfully get listed or not. We designed a proper scheme, so as to help the client avoid the significant tax burden. Our efforts paved a way for the client to get listed in Hong Kong.

What are the main points that differentiate your competitors, especially tax lawyers?

Most tax experts in China law firms come from Big Four accounting firms. Although some have legal education background and even lawyer licenses, they have not purely practiced other law areas (e.g. corporate, litigation and etc.). As against them, I ever worked with courts, advised clients in transactions and etc., and therefore:

  • designs deal structures from both tax and law perspectives;
  • analyzes the nature of business arrangements from the substance perspective by applying other areas of law;
  • analyzes the legal liability of the non-compliant tax acts and even represents clients in administrative and judicial proceedings.
What practices are you developing recently? And why?

Our recent efforts will be put into the below two areas:

  • To provide private wealth management service:
    We provide private wealth management service for high net worth individuals. Tax is the most significant element in this area. Since China is developing fast, the amount of high net worth individuals are enlarged. They have strong demand to globally allocate their wealth for tax purpose and to realize the sustainable family inheritance. Aiming at the aforementioned demand, our firm has established a team combining lawyers practicing taxation law, trust law and family law, so as to provide one-stop service to high net worth individuals.
  • To serve Chinese companies to invest abroad:
    Previously we served foreign companies to solve their tax issues when investing within China, while presently we serve Chinese companies to solve their tax issues when investing abroad. These Chinese companies used to solve their tax related problems through their relationships with tax authorities. However, at present, when they consider investing abroad, they come to realize that they need tax professional service. For this demand, our China tax lawyers are the ideal professionals. We can use foreign languages as our working language, and, based on the bilateralism of international tax treaties, we can use our experience gained in serving foreign companies investing within China to serve Chinese companies to invest abroad.

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