September 2021

  • Bulgaria
    • Bulgarian IT Industry Competitive Globally, Boasts Revenue Growth

      Bulgaria’s software industry is among the few left unaffected by the world pandemic. Quite the opposite – the crisis born of the global spread of coronavirus actually gave an impetus to one of the few Bulgarian industries that are competitive globally.

      According to data of the Bulgarian Association of Software Companies (BASSCOM), in 2020 the sector marked a 10% growth in revenues, compared to the 5.5% drop in GDP in the country. Almost 38,000 people were employed in the software sector during this period, their numbers expected to reach 41,667 by the end of 2021. More than 60 software brands have offices on the Bulgarian market, and entrepreneurs from more than 20 different nationalities have been setting up new companies and opening offices in the country despite the crisis, a BASSCOM study shows.

      “The most in-demand experts on the market now are Java or JavaScript, as well as PHP specialists,” says Petya Tsvetanova from an HR company working for the IT sector. She says it is the most dynamic sector in the country during this last year of epidemic restrictions.

      Almost half of the vacancies now available are for distance work. Not to mention the fact that, on average, the pay is more than three times higher than in any other sector in the country. What are the salaries of IT specialists in this country?

      “They vary. Let us say – for junior positions, i.e. for someone who is yet to graduate, the monthly pay may start at 1,700-1,800 Leva but then climbs steeply very quickly. Two years later they could earn a monthly salary of 5,000, depending on the projects and the technologies they are working with. People with plenty of experience over many years – for example, with more than 10 years in the branch – could earn 8,000-10,000 Leva a month.”

      The Bulgarian IT market displays a curious feature – around 35% of all people employed in it are women.  This puts the country top of the list of EU countries in this indicator which is double the average percentage for the Union. And one more thing – more and more Bulgarians living abroad have been coming back to the country to work in IT. According to BASSCOM data, in some companies their number has reached 10% of all staff.

      “Our experts are highly educated and well trained. They are more reliable than the Indian market, for example, where people are finding it more difficult to get the hang of things, and there is prejudice against such markets. Bulgarian experts have one more advantage – we are a member of the EU and they do not need special permits to work in Europe. So that we have a huge potential, and not just because of the country’s geographic location but also because of the level of education and skills obtained,” Petya Tsvetanova says.

      Leading international IT companies, which have opened regional offices in Bulgaria, are hiring mostly Bulgarian staff in managerial positions. They are people who have studied here, in this country. i.e. their skills are the result of the Bulgarian system of education.

      “They have graduated from Bulgarian universities like the Kliment Ohridski University, or the Technical University of Sofia. These universities train excellent specialists in the sector who readily find employment in this country or abroad,” says Petya Tsvetanova in conclusion.

      Source: Novinite

    • Bulgaria Ranks 85th in Digital Quality of Life Globally

      Bulgaria ranked 85th, according to a study assessing the digital quality of life worldwide. This year the survey covers 90% of the world's population and rates 110 countries, looking at five main pillars of digital life: accessibility and quality of the Internet, e-infrastructure, e-security and e-government, according to BGNES.

      The DQL (Digital Quality of Life Index) study is conducted by cybersecurity company Surfshark and evaluates countries based on a set of five main digital wellbeing pillars.

      Bulgaria is 22nd in terms of internet access, 34th in internet quality, 64th by indicator "Electronic Infrastructure", 51st in terms of electronic security and 49th in section "E-Government

      The Bulgarian must work 596 seconds to afford the cheapest mobile Internet, and 82 minutes to afford the cheapest broadband internet.

      The report shows that 6 out of 10 countries with the highest scores are in Europe, following last year's trend. Denmark is first in the DQL for the second year in a row and is closely followed by South Korea and Finland. Israel and the United States are in the top five out of 110 rated countries. The last 5 places are Ethiopia, Cambodia, Cameroon, Guatemala and Angola.

      Regionally, the US stands out as the  country with the highest digital quality of life in America, while South Korea holds the leading position in Asia. Among countries in Africa, South Africans enjoy the highest quality of their digital lives, while Australia leads in Oceania, surpassing New Zealand in various digital areas.

      Other findings of the study suggest that broadband is globally less affordable this year. Comparing countries included in both DQL20 and DQL21, in 2021 people need to work 11% more (25 minutes more) to afford broadband internet. The worst internet in the world is the least accessible. Residents of some countries such as Nigeria, Ivory Coast and Mali have to work roughly a week of work to afford the internet.

      The 2021 DQL survey covers a population of more than 6.9 billion rating five main pillars and 14 support indicators that provide a comprehensive measure. The research is based on open source information provided by the UN, the World Bank, Freedom House, the International Communications Union and other sources.

      Source: Novinite

    • Bulgarian Energy Ministry Set to Help Businesses Affected by High Electricity Prices

      The Energy Ministry and other government departments will prepare measures in support of businesses that have been put in a tight corner by the high electricity prices in recent months. This transpired after a meeting of Energy Minister Andrei Zhivkov with businesses representatives Friday. The current daily electricity consumption in Bulgaria is 4,000 MWh and another 2,000 MWh are exported from this country. The Minister said that there is panic on the energy markets across the EU and Bulgaria is not spared. The price of electricity on September 17 reached 330 leva/MWh. Zhivkov also said that from the beginning of September, the price of electricity in Bulgaria is among the lowest in the EU but that is no reason for consolation as prices are going up across the EU. The Maritsa East 2 coal-fuelled power plant, which produces cheap electricity normally sold on the regulated market but now also going to the free market to ease prices, works at near-full capacity with only two of its eight power units off for scheduled maintenance. "It is important for us that industry remains competitive and make sure there are no bankruptcies and shocks in the economy," said Zhivkov. According to Konstantin Simeonov, President of the Bulgarian Federation of Industrial Capital, said that industry will need "several hundred million of euro until the end of 2021 to mitigate the shocks in the economy.

      Source: Novinite

  • China
    • Legislation of Urban Maintenance and Construction Tax and Clarification for its Taxation Basis

      The Law of the People's Republic of China on Urban Maintenance and Construction Tax, adopted at the 21st Session of the Standing Committee of the 13th National People's Congress on August 11, 2020, shall come into force as of September 1, 2021.   State Tax Administration announced as follows to clarify the matters including the method for the determination of the basis for urban maintenance and construction tax:
      1. The calculation of urban maintenance and construction tax shall be based on the amounts of value-added tax ("VAT") and consumption tax (hereinafter referred to as the "Two taxes") actually paid by taxpayers according to law. But the basis shall:
      2. Add the amount of “exempted & offset VAT”;
      3. Exclude the Two Taxes paid due to import of goods or sale of labor services, services and intangible assets within the territory by overseas entities and individuals;
      4. Deduct the amount of the Two Taxes directly exempted & reduced and the amount of refunds of VAT credit at the end of the period. The amount of the “Two Taxes directly exempted & reduced” shall exclude the amount of the Two Taxes refunded under the methods of "return after collection", "refund after collection" and "refund upon collection".
      5. The basis for calculation and collection of education surcharge and local education surcharge shall be the same as that for calculation of urban maintenance and construction tax.
      Chinese reference could be found in STA official website:
    • Further Notice on Urban Maintenance and Construction Tax

      The State Taxation Administration released on August 31, 2021 the Announcement on Matters Related to the Collection and Management of Urban Maintenance and Construction Tax, to be implemented from September 1, 2021. It is a supplementary announcement regarding the matters in our earlier email below. It further announces that:

      1. The taxpayer shall deduct the returned tax credits from the tax calculation basis for Urban Maintenance and Construction Tax in the next period from the date of receipt of the returned tax credit.
      2. The amount of returned tax credits is only allowed to be deducted in the urban construction tax calculation basis determined in accordance with the general VAT calculation method. The balance not fully deducted in the current period shall be continued to be deducted in the subsequent period according to relevant provisions.
      3. Small-scale VAT taxpayers who correct and mend the Urban Maintenance and Construction Tax which tax basis is determined using general tax method before, are allowed to deduct the balance has not been deducted.
      4. For the urban construction tax payable for “Exempted & offset” VAT, taxpayers shall declare and pay it to the competent tax authorities in the next period approved by tax authorities for “VAT of exempted & offset ”.
      5. The term of tax obligation for urban maintenance and construction tax is the same as that for VAT and consumption tax. If a taxpayer has paid more VAT and consumption tax than it's required to and it has received tax rebate, the overpaid urban maintenance and construction tax shall be rebated as well. Unless otherwise stipulated, the urban construction tax attached to the two taxes shall not be refunded if the two taxes are first under the methods of "return after collection", "refund after collection" and "refund upon collection".

      Chinese reference could be found in STA official website:

    • STA Clarifies Preferential Policy on R&D Expense Deductions

      The State Taxation Administration released on September 14, 2021 the Announcement on Further Implementing the Policy of R&D Expense Deductions. The announcement applies to tax deductions for 2021 and subsequent years.

      There are three key points in the announcement. The first is to allow taxpayers to enjoy preferential policy on R&D expense deductions for the first three quarters when they make prepaid tax declarations in October; the second is to optimize and streamline account books on R&D expenses, and taxpayers can use the 2015 or 2021 version of account books; the third is to optimize how to calculate "other related expenses" on R&D projects, so as to increase tax deductions.

      More detailed information could be found in Chinese at STA official website at:

      And STA also provides its official explanation on the announcement at:

    • Canton Fair to kick off in October

      The 130th session of the China Import and Export Fair, also known as the Canton Fair, is scheduled to kick off on Oct. 15 in south China's Guangdong Province, with both online and offline activities, said the organizer Wednesday.

      It will be the fair's first time to resume offline activities following the previous three virtual events held in 2020 and April 2021 due to the COVID-19 impact. The new session will be themed "dual circulation," which refers to China's new development paradigm where domestic and overseas markets reinforce each other, with the domestic market as the mainstay.

      About 100,000 exhibitors are expected to participate offline, and over 200,000 buyers will purchase goods on-site, said Zhang Jinsong, head of the provincial department of commerce.

      Meanwhile, the event will hold 52 online promotion activities targeting buyers from 40 countries and regions, said Chu Shijia, deputy director and secretary-general of the fair.

      Founded in 1957, the Canton Fair is seen as a significant barometer of China's foreign trade. The 129th session attracted approximately 26,000 companies showcasing more than 2.76 million exhibits.


    • China steps up fiscal support for Yangtze River Economic Belt

      China will provide fiscal incentives to support the high-quality development of the Yangtze River Economic Belt, with funds set aside to finance green projects, the Ministry of Finance said Friday.

      According to the detailed plan released on its website, the ministry will increase transfer payments to key areas of ecological significance in the region, guide funds to support pollution control, and direct investments from the National Green Development Fund into green projects in the region.

      The ministry also vowed to improve infrastructure in the region, and it plans on mobilizing investment from the central budget to finance local water conservancy and waterway construction projects.

      Local governments are encouraged to issue bonds for major public welfare projects under the premise that risks are under control, the ministry said.

      It also voiced support for accelerated development of opening-up platforms and faster transition towards innovation-driven development in the region.

      The Yangtze River Economic Belt covers nine provinces and two municipalities, accounting for more than 40 percent of the country's population and economic aggregate.

      China's top leadership has called for efforts to turn the economic belt into the country's main focus for green development, the major artery for a smooth "dual circulation" of domestic and international markets, and the main force spearheading high-quality economic development.

    • China eyes creating safe, efficient int’l air logistics chain

      China's civil aviation authorities are trying to create a safe and efficient international air logistics chain, according to the Civil Aviation Administration of China (CAAC).

      Pushing forward under strict epidemic prevention and control policies, the move will boost the rapid and healthy development of the country's air logistics industry, said the CAAC.

      The CAAC will make efforts to strengthen support, improve the industrial structure and develop a friendly environment for the air logistics sector, which helps sustain the domestic supply chain and facilitate the "dual circulation" of domestic and international markets.

      Air cargo transport plays an important role in emergency medical supplies delivery in the fight against COVID-19, as well as sustaining the domestic and global supply chain.

      In the first half of 2021, China's civil aviation industry handled more than 3.74 million tonnes of air freight, a 6.4 percent rise from the corresponding period in 2019, before the pandemic.


    • Economic Watch: Emerging opportunities, policy backdrop to further unleash China’s consumption potential

      Although China's consumer market slackened amid the recent COVID-19 resurgence and floods, emerging opportunities and the consolidated policy backdrop will lend steam to the country's consumption growth looking ahead.

      The epidemic situation and floods hindered travel and held back consumption during the summer holiday, sending the year-on-year growth rate of retail sales of consumer goods to 2.5 percent in August, down by 6 percentage points from July, according to the National Bureau of Statistics (NBS).

      Acknowledging the short-term factors weighing on August's consumption performance, NBS spokesperson Fu Linghui Wednesday told a press conference that the overall stable recovery momentum of consumption has not wavered.

      The cumulative growth of retail sales in the first eight months remained sound, at 18.1 percent, Fu noted, adding that the two-year-average growth rate slightly eased from that in the first seven months to 3.9 percent, maintaining overall stability.

      Among the retail sectors surveyed by the NBS, online consumption remained vibrant, with sales in consumption-upgrade sectors squeaking out growth in August, according to Fu.

      In the first eight months, online sales of physical goods expanded by 15.9 percent year on year, accounting for 23.6 percent of the total retail sales during the period.

      In August alone, sales of goods in consumption-upgrade sectors, including sports and entertainment goods, and cultural goods and office utilities, both grew faster than in July, surging 22.7 percent and 20.4 percent from a year earlier, respectively, the NBS data shows.

      Citing the aforementioned data, Fu told the press conference that the consumption scale is still expanding, while the consumption structure is upgrading and new growth drivers are developing.

      In the meantime, China's consumer market also boasts great growth potential, especially in the sectors of eco-friendly and smart products, as well as those related to the elderly population.

      To unleash the consumption potential, Fu said the country will strengthen effective supply by expanding production scales of smart home appliances and low-carbon products to meet people's aspirations for a better life.

      The spokesperson is optimistic about future consumption activities, citing the upgrading demands of the large middle-income group of over 400 million people as an important factor at the press briefing.

      Also noticing the short-term pressure on the country's consumer market, the country's top economic planner pledged to strengthen cooperation with relevant departments on the overall planning of consumption activities.

      Supervision will be optimized to improve the consumption environment, Chang Tiewei, an official with the National Development and Reform Commission told a press briefing Thursday, adding that the market order will be further regulated to give consumers confidence in spending.

      Reforms to spur consumption vitality, including removing administrative limits on shopping activities and relaxing market entry to the service consumption sector, will also be promoted, while weak links in logistics and e-commerce systems in rural areas will be strengthened, Chang added.

      Also being optimistic about the future market prospects, Chang said that as COVID-19 is brought under control and consumption-promotion policies gain more steam, consumption will maintain restorative growth momentum later this year.

      "Consumption will still serve as the cornerstone of China's economic development," the NBS spokesperson Fu Linghui noted, expecting the epidemic-control efforts to take hold and the consumption environment to continue to improve.


  • Focus Africa
    • Africa in Review by the Numbers (September 2021)

      $3 trillion

      Africa's GDP as projected by the Africa Export-Import Bank (Afreximbank), making the AfCTA the biggest free trade area in the world. The free trade area is expected to bring 30 million people out of extreme poverty and raise 68 million others who live on less than $5 per day to $50. (National Accord Newspaper)

      205,880 Terabytes

      Amount of data consumed by Nigerians in 2020, an increase that is directly linked to the disruptions caused by the COVID-19 pandemic, which led a number of activities and functions to be held virtually, including learning and corporate meetings, among others. (The Guardian)


      Growth in Kenya's earnings from exports to Uganda after a deal that cleared tax hurdles for goods such as pharmaceuticals, confectionery, juice and spirits. The deal saw Uganda commit to removing a 13% duty on Kenya’s juices, malted beer and spirits, as well as a 12% verification fee on pharmaceuticals. (The East African)


      Growth of the bitcoin market in Africa in the past year, making it one of the fastest-growing regions for cryptocurrency adoption. According to a report by Chainalysis, African countries collectively received around $105.6 billion worth of cryptocurrency between July 2020 and June 2021. (Forbes)

      4 billion tonnes

      The annual capacity of a new recycling plant in Mozambique to be run by Gravita India for the commercial production of aluminium. Gravita will procure domestic aluminium scrap for production from the plant and will cater to the needs of auto and FMCG sectors in South and East Asian markets. (Club of Mozambique)

      6 outlets

      Number of Shoprite stores in Uganda that will be taken over by Carrefour as the South African retailer exits the market this year. The transaction will further expand the regional presence of Carrefour, whose franchise is held by Dubai-based multinational Majid Al Futtaim. (Business Daily)

      $136 million

      The value of Nigeria’s green bonds market, comprising four issuances over three years, two from the federal government and corporate issuances from Access Bank and North South Power Company. (The Guardian)

      1.4 million tonnes

      Cocoa beans produced in Ghana's 2020/21 season, a 45% increase on the year before, and topping the record 1 million tonnes achieved in 2009/10. The cocoa board attributed the successful harvest to the implementation of programmes such as increased irrigation, hand pollination and rehabilitation of old and diseased-infected farms. (Techcrunch)


      Growth of South Africa’s asset management market, surpassing the 10-year average and topping regional and global growth rates, according to a report by Boston Consulting Group. The strong performance is driven by institutional investors, which contribute 59% of assets under management. (Moneyweb)

      15 startups

      African startups in Y Combinator's 2021 summer batch of 377 total. The figure is a record for African startups in a single YC cohort, up from 10 in the winter group. Africa's startups hail from seven countries: Nigeria (5), Egypt (4), Morocco (2); and Kenya, Ghana, Zambia and South Africa with one each. (Techcrunch)

      $57 million

      Amount spent by Kenya's KCB to acquire Bank Banque Populaire du Rwanda Plc (BPR) from London-listed Atlas Mara Limited and other investors. This move is part of a strategy by KCB Bank to expand its operations in the regional market and take advantage of future growth opportunities given the low uptake of financial services in those markets. (Business Daily)


      Growth in electric car sales in Egypt, with a total of 1.78 million cars during the first nine months of 2020, compared to 1.61 million units during 2019. This follows a favourable government policy on environmentally friendly mobilisation, making Egypt one of the most promising markets in Africa and the Middle East for the localisation of electric vehicle technology. (Daily News Egypt)
        Review by Kili Partners . Powered by Asoko Insight
    • Rwanda Commits to Start Automatic Exchange of Financial Account Information by 2024

      According to a press release of 28 September 2021, published by the OECD, Rwanda has committed to implement the international standard for the OECD Automatic Exchange of Financial Account Information Agreement (2014) (AEOI), by September 2024. This commitment makes Rwanda the 120th Global Forum member to commit to start AEOI by a specific date, and the ninth African country to do so.

      These new international standards already adopted by more than 100 countries will help Rwanda to generate additional tax revenues by allowing it to identify cases of tax evasion and will also help to boost tax compliance.

      For more information, see OECD's press release of 28 September 2021.

  • Hong Kong
    • Real Estate and Construction Services Industry in Hong Kong


      • Building and construction: Hong Kong companies have gained a reputation over the years for the rapid construction of quality high-rise apartment blocks and office towers. The adoption of specialised construction techniques, such as reclamation and design-and-build methods, has made Hong Kong a regional leader.
      • Architecture: Hong Kong is a leading expert in high-rise design, slope design, high-density design and designing with space constraints. It is renowned for high-rise buildings typified by the skyscrapers in Hong Kong’s central business district, which showcase the innovative application of building materials, technology and designs combined with the versatility of Hong Kong's architects.
      • Engineering: Hong Kong's engineers are active in exporting their services to the region, particularly to Mainland China. Major types of professional engineering services currently being exported include project management, building services work and engineering consulting.
      • Surveying: Hong Kong is the region's leader in the surveying profession in terms of experience and technical expertise. The buoyant construction market over the last two decades has provided invaluable exposure for the local surveying profession to a wide range of projects. 

      Industry Data


      Major Indicators of the Construction Sector



      YOY %









      Gross value of construction works performed (HK$ million)




      Source: Key Statistics on Business Performance and Operating Characteristics of the Building, Construction and Real Estate Sectors (2019 Edition), Census and Statistics Department

      Dec 2020 (YOY %)

      Mar 2021 (YOY%)

      Number of Construction Sites

      1,668 (-0.6)

      1,681 (+3.5)


      809 (+15.1)

      789 (+3.5)


      859 (-11.9)

      892 (+3.5)

      Employment at Construction Sites

      96,117 (-3.8)

      102,702 (+1.6)


      41,199 (+9.4)

      43,129 (+10.6)


      54,918 (-11.8)

      59,573 (-4.0)

      Source: Quarterly Report of Employment and Vacancies at Construction Sites (Fourth Quarter 2020 and First Quarter 2021), Census and Statistics Department

      Gross Value of Construction Works Performed by Main Contractors





      HK$ million

      YOY %

      HK$ million

      YOY %

      HK$ million

      YOY %

      Private sector sites







      Public sector sites







      Locations other than sites







      All group







      Source: Report on the Quarterly Survey of Construction Output (Fourth Quarter 2020), Census and Statistics Department
      Real Estate

      Major Indicators of the Real Estate Sector












      Number of real estate development projects




          Private residential premises




          Office buildings




      Source: Key Statistics on Business Performance and Operating Characteristics of the Building, Construction and Real Estate Sectors (2019 Edition), Census and Statistics Department
      Architectural, Surveying and Engineering

      Major Indicators of the Architectural, Surveying and Engineering Services Sector Related to Real Estate and Construction

      Dec 2020 (YOY%)

      Mar 2021 (YOY%)


      2,692 (+3.4)

      2,698 (+2.5)


      30,309 (+2.1)

      30,266 (+2.3)

      Sources: Quarterly Report of Employment and Vacancies Statistics (First Quarter 2021), Census and Statistics Department
      Range of Services

      Types of Real Estate and Construction Services

      Building and construction
      • Buildings
      • Structures and facilities
      • Non-site activities
      • Planning
      • Design
      • Development
      • Civil
      • Structural
      • Building
      • Electrical
      • Mechanical
      • General surveying
      • Quantity surveying
      • Building surveying
      • Land surveying
      Services Providers Building and Construction Hong Kong's construction industry is characterised by a small number of large local contractors, a large number of overseas contractors, and a high level of sub-contracting, with a substantial proportion of companies being both developers and contractors. Most of Hong Kong's construction companies are small in size. Companies that carry out construction work worth less than HK$10 million (US$1.3 million) in terms of annual gross value account for as much as 86% of the industry. The majority of the small companies act as subcontractors for the large ones, which tend to be main contractors. There are also a number of big construction companies capable of handling projects requiring sophisticated technology and strong financial backing, which are expanding their business across the region. Hong Kong contractors tend to be experienced and highly skilled. There are no formal restrictions on entry to the contracting business in Hong Kong. Foreign and local contractors are treated alike, and all are allowed to tender local public sector projects. Due to the growing size and complexity of building projects, it is now common to award large and complex building contracts as a single package to multi-disciplined contractors. Architecture All practitioners have to register with the Hong Kong Institute of Architects (HKIA), which has more than 4,000 members. Most of the architect firms in Hong Kong are locally owned. Attracted by the business opportunities in the region, a number of foreign architects have come to work in Hong Kong. Engineering Many engineers are members of the Hong Kong Institution of Engineers (HKIE), a local professional body for engineers. First established as the Engineering Society of Hong Kong in 1947, the HKIE was incorporated by government ordinance in 1975 to set professional standards and to encourage professional development for local engineers. In 1992, the HKIE qualification was recognised for government services appointments. The HKIE has become a key qualifying body for a wide range of engineering disciplines.
      Membership of the HKIE

      Number of Members as at Jun 2020

      Civil Division


      Structural Division


      Building Services Division


      Geotechnical Division


      Environmental Division


      Electrical Division


      Mechanical, Marine, Naval Architecture & Chemical Division


      Information Technology Division


      Source: Hong Kong Institution of Engineers
      Surveying The number of surveyors practising in Hong Kong has been growing as a result of increasing demand and opportunities in the local and surrounding markets. A number of leading international surveying firms have established their regional offices in Hong Kong. Three divisions of Hong Kong’s surveying industry have gained mutual recognition of professional qualification with Mainland China, namely general practice, quantity surveying and building surveying. The Hong Kong Institute of Surveyors (HKIS) is a professional body established in 1984. As of December 2020, HKIS has over 7,000 corporate members.
      Corporate Membership of HKIS

      Number of members as of Dec 2020

      Quantity Surveying


      General Practice


      Building Surveying


      Property and Facility Management


      Land Surveying


      Planning and Development


      # Holding multiple membership Source: Hong Kong Institute of Surveyors
      Exports of Services

      Hong Kong Exports of Services




      Construction Services
      Value (HK$ million)




      Share of total service exports (%)




      YOY growth (%)




      Architectural, Engineering, Scientific and Other Technical Services
      Value (HK$ million)




      Share of total service exports (%)




      YOY growth (%)




      Source: Hong Kong Trade in Services Statistics (2019 Edition), Census and Statistics Department
      Hong Kong is internationally renowned for its expertise in the construction of quality high-rise residential and commercial buildings, and its services are in great demand in overseas markets, particularly in Asia. Mainland China is the largest export market for Hong Kong’s architectural, engineering and surveying services. A number of Hong Kong companies in the engineering sector are also exporting their services via working for multinational companies in South-east Asia, North America and Western Europe, covering a wide range of industries including information technology, telecommunications, chemicals and fast-moving consumer goods.

      Industry Development and Market Outlook

      Investment in Local Public Infrastructure   To achieve the objective of promoting economic growth through infrastructural development, the Hong Kong government has been increasing its infrastructure investment over the past few years. Hong Kong’s ten mega infrastructure projects, first announced in the 2007 Policy Address, are being rolled out in phases and several transport projects are being carried forward in tandem. The Hong Kong-Zhuhai-Macao Bridge and Guangzhou-Shenzhen-Hong Kong Express Rail Link were opened in 2018, improving logistics and transport efficiency between Hong Kong and mainland cities. The West Kowloon Cultural District, an important cultural infrastructure investment of Hong Kong, has launched The Xiqu Centre, its first landmark performing arts venue, in January 2019. Progress has also been made on the Rail Gen 2.0 project, with full Tuen Ma Line commenced services in June this year together with two new MTR stations, namely To Kwa Wan and Sung Wong Toi. Other major projects under way include MTR’s East Rail Line extension to Admiralty, Kai Tak Development and development areas in the northern New Territories. The 14th Five-Year Plan and the Greater Bay Area The National 14th Five-Year Plan promulgates “expedition of the construction of inter‑city railways, co-ordinated planning for the positioning of ports and airports, and optimisation of the allocation of maritime and aviation resources” to strengthen connectivity in the Greater Bay Area, which calls for faster growth in infrastructure construction in the region. The Plan also raises support for Hong Kong to enhance its status as an international aviation hub, underscoring the importance of the on-going Three-runway System (3RS) Project at the Hong Kong International Airport. The pavement of the third runway was completed in September this year, and the entire 3RS Project is expected to complete by 2024. Belt and Road Opportunities   In March 2015, China’s National Development and Reform Commission issued The Vision and Actions on Jointly Building the Silk Road Economic Belt and the 21st Century Maritime Silk Road, outlining the framework of the Belt and Road Initiative (BRI), co-operation priorities and mechanisms. As of 2020, it is estimated that mainland China has invested about US$770 billion into projects along the BRI routes, with over one-third of the investments went to transport infrastructure projects such as ports, railways, and roads, and real estate projects.[1] Hong Kong is renowned for its excellent professional services and it is expected that the industry can benefit from the ample opportunities ahead. A list of available investment projects along the Belt and Road can be found here. Developing Asia’s Infrastructure Needs  Many developing Asian countries, such as India and Indonesia, have recognised the urgent need to upgrade their basic infrastructure, road networks, port facilities, housing and city planning to keep up with rapid economic growth. According to the Asia Development Bank (ADB), the region is estimated to require US$26 trillion from 2016 to 2030 to meet its infrastructure requirements, meaning US$1.7 trillion will be needed for each intervening year. Green Building Boom  The growing awareness of the need for environmental protection is creating an increasing demand for green buildings. Hong Kong’s Urban Renewal Authority has announced its environmental sustainability policy for future urban renewal projects. According to the Hong Kong Green Building Council, more than 2,300 buildings are certified by BEAM Plus, a leading initiative in Hong Kong to offer independent assessments of building sustainability performance. One example is the Hong Kong’s Children Hospital, which has installed district cooling system, solar hot water system and photovoltaic panels on roof tops to reduce energy consumption. Hong Kong is outstanding in terms of integration and application of technologies and know how in designing and constructing green buildings. A prime example is Hong Kong’s K11 Atelier King’s Road, which is the first building in the world to achieve all platinum levels pre-certifications of the WELL Building Standard, Hong Kong BEAM Plus and the US’ LEED. The building has incorporated a number of green technologies such as use of low e-glazing, sensor-linked LED lighting system to enhance its sustainability features. It is also equipped with Asia’s largest solar photovoltaic thermal (PVT) installation on the rooftop to achieve higher energy savings and efficiency. Technology Adoption   In order to strive under the competitive global environment, it is critical for the construction industry in Hong Kong to promote efficiency and innovation by adopting modern construction methods and techniques, information technology (IT) and automation technology. The use of IT technologies such as Building Information Modelling (BIM) has increased across the industry, including large-scale project owners such as MTR Corp and Airport Authority. The introduction of Construction Industry Council (CIC) BIM Standards allows industry participants to manage and assess BIM deliverables by architects, engineers, surveyors and contractors. To encourage innovative technologies in the construction sector, the Hong Kong government has set up a HK$1 billion Construction Innovation and Technology Fund (CITF) to help boost technology adoption and increase productivity via automation and digitisation. Categories of funding includes BIM, Modular Integrated Construction (MIC), prefabricated steel rebar, and other advanced technologies such as automated wall plastering machines. As of July 2021, over 1,900 CITF applications have been approved with total grant amount more than HK$487 million. Gammon Construction, a Hong Kong-based construction and engineering services provider, has been actively adopting technologies to boost productivity and safety in construction. Earlier this year, the company introduced G-eye – a mobile monitory system that provides real-time inspection of front-line conditions and site safety at any time, from any location. By coordinating with artificial intelligence (AI) behaviour detection, the system can also alert workers who enter restricted areas or who are not wearing the necessary protective equipment to enhance their safety awareness.

      The Closer Economic Partnership Arrangement between Hong Kong and the Mainland (CEPA) 

      CEPA provides many benefits to Hong Kong’s real estate and construction businesses, ranging from greater flexibility in entering the mainland market to mutual qualification recognition. The latest Agreement on Trade in Services consolidates and extends the liberalisation of services to the whole of China, which granted Hong Kong Services Suppliers (HKSS) national treatment to provide various construction and related engineering services across China. As of 31 August 2021, there were 106 approved HKSS in the construction professional services and construction and related engineering services sectors, and 29 approved HKSS in the real estate services sector. Further information on the latest CEPA agreements can be found here.  

      Source: HKTDC Research by Melissa Ho

      [1] Green Belt and Road Initiative Center
    • Hong Kong Logistics: Cutting-Edge Fashion and Wine Freight Solutions

      Hong Kong is an international logistics hub boasting a vibrant logistics sector. More logistics options have been made available to trading companies in recent years, thanks to changes in the market and government policies. For instance, in addition to traditional truckload shipping, goods can now be shipped to the mainland in the form of cross-border e-commerce retail imports. Meanwhile, as major cities like Beijing, Shanghai and Guangzhou continue to be key high-end consumer goods markets, Hainan is emerging as another prime consumption centre thanks to its duty-free shopping policy for travellers.

      Hong Kong logistics solutions providers face a serious challenge in how to adjust operations swiftly to meet client demands. In the face of an ever-changing logistics market, some operators have proactively taken advantage of market changes and created new opportunities, including CN Logistics International Holdings Limited. Founded in 1991 and listed in Hong Kong in 2020, CN Logistics is a leading logistics solutions provider specialising in high-end fashion and wine. The company operates 36 distribution centres in regions including Hong Kong, mainland China, Taiwan, Switzerland and Italy.

      In an interview with HKTDC Research, Suki Cheung, Director of CN Logistics, shared how the company copes with changes in the market and her views on the strengths of Hong Kong’s logistics sector, which should provide a valuable reference for industry players.

      Being reliable and progressive

      Attributing the company’s sustained business growth to its solid track record and word-of-mouth reputation, Cheung said: “As high-end fashion items and wine are both high-value, fragile products, clients attach the utmost importance to logistics solutions providers’ goodwill and experience. Given the products’ hefty price tags, security is a major concern. A branded handbag or a bottle of vintage wine can easily sell for hundreds of thousands of Hong Kong dollars, and it is critical for us to ensure that such products are delivered safely to their destinations.” “Security aside, clients are also particular about logistics providers’ choice of transport solution. For example, some high-end fashion cannot be folded and must be hung up all the way during transport. For some leather products, the logistics provider must ensure that they are kept in a controlled environment to prevent the leather becoming brittle because of high temperature or mould growing as a result of high humidity.”

      Cheung saw staff retention as a key element in providing a good service, ensuring that expertise developed over the years stays within the company. She said: “To be able to attend to every detail in the transport process a team with substantial experience is a requisite. CN Logistics has a stable team, many members of which possess over 20 years’ experience, having joined the company when it first started. Our wealth of experience means that we are adept in handling logistics for high-end fashion items and wine, earning positive word-of-mouth among our clients.”

      “Our experienced team also assists the company in making the best decisions on our development strategies. In recent years, there have been heated discussions on automated logistics. We have built a semi-automated 90,000 sq ft warehouse in Shanghai which operates as a storage and distribution centre for high-end fashion.” “Wine, however, is a product carrying certain historical and cultural legacies and the wine bottle and wine box also make up a significant part of the product value. Hence, we still count on our experienced team to manually handle the logistics for wine to safeguard efficiency, quality and safety.”

      Tailored solutions

      Worldwide product supply chains have been disrupted during the pandemic. Outlining CN Logistics’ proactive efforts to help businesses resolve logistics blockages, Cheung said: “Unable to travel out of mainland China to shop during the pandemic, mainland consumers of high-end fashion and wine naturally turned to the domestic retail market. To cater to these consumers’ demands, apart from strengthening the manpower in our mainland warehouses, we also offered clients the cross-border e-commerce retail import logistics solution.” “High-end fashion items and wine imported through the general import channel are subject to customs tariffs, VAT and consumption tax levied by the mainland government. Products imported in the form of cross-border e-commerce retail transactions, however, enjoy relatively lower tax rates overall. Therefore, during the pandemic, many high-end fashion and wine suppliers were interested in expanding into cross-border e-commerce retail imports, and enhancing their sales and brand awareness by launching online sales.” “We are now co-operating with two famous mainland e-commerce platforms which have helped open online shops for up-market fashion and wine businesses, as well as track sales data to gain insights. On our part, we assist in handling logistics and customs declaration for these companies.” “The response so far has been very positive. A bottle of fine wine from Europe can be delivered to a mainland consumer from Hong Kong within five to eight days after an order is placed.” In addition to the new cross-border e-commerce retail avenue, the Hainan Free Trade Port is emerging as a premier destination for mainland consumers seeking high-end fashion and wine. Elaborating on the company’s business in Hainan, Cheung said: “Since Hainan rolled out the duty-free shopping policy for travellers1 in July 2020, the Hainan Island has quickly turned into a ‘shopping paradise’ for high-end fashion and wine. CN Logistics has assisted high-end fashion and wine companies in shipping their goods from Guangzhou and Hong Kong to Hainan for sale. Moreover, we also took part in the first China International Consumer Products Expo in Haikou in May this year. Hainan’s development prospects are most promising, and it will be a key focus of our business going forward.”

      Corporate social responsibility

      The society is placing increasing emphasis on green supply chain management. Where high-end consumer goods are concerned, consumers care particularly about whether enterprises are using more eco-friendly packaging materials. Detailing CN Logistics’ initiative to offer green supply chain solutions, Cheung said: “The concept of ‘circular economy’ 2is extremely relevant to the up-market fashion and wine businesses, as such products require more packaging materials than other goods to ensure that they are properly stored and transported. Meanwhile, fashion items, often being seasonal and susceptible to changing trends, have relatively shorter product cycles. These factors, together with consumers’ rising environmental awareness, means that businesses have a keen demand for green supply chain solutions.” CN Logistics supports the United Nations Sustainable Development Goals, under which recycling and carbon emissions reduction are incorporated into day-to-day business operations. Cheung spelled out the company’s environment protection efforts, saying: “First, we provide clients with specially designed recyclable cartons supplied by our e-commerce platform partners. Using such cartons forms part of our co-operation agreement with the platforms in order to reduce the quantity of cartons discarded.” “Second, we provide services collecting recyclable materials from our clients, such as plastic bags, clothes hangers, cosmetics plastic bottles, used clothes donated by consumers, etc. These materials will then be handed over to our recycling partners.” “Third, we started a trial using electric vehicles delivering goods to and from our distribution centres in Hong Kong and mainland China this year. Fourth, through supporting projects listed on the United Nations Carbon Offset Platform, we strive to promote carbon neutrality. In 2020-21, we achieved a reduction in greenhouse gas emissions equivalent to 6,403 tonnes of carbon dioxide.” These green efforts have contributed to significant improvements in the company’s carbon footprint, despite not improving its bottom line directly. Cheung said: “These projects have enabled our clients to participate in building a circular economy and lowering carbon emissions, and can form part of their companies’ environmental, social and governance (ESG) initiatives.” “Frankly, providing such green supply chain solutions to clients does not generate profit for us. Take collecting clients’ recyclable materials as an example: we have to deploy staff to help sort materials and pay for recyclers to handle them. Yet, we acknowledge that environmental protection is an irresistible trend and a common responsibility for every business in the logistics sector.”


      Amidst all the changes in Hong Kong’s logistics sector in recent years, CN Logistics continues to maintain its leading status. Cheung believes that the company’s success lies in its strong sense of preparedness for the future, saying: “Many of our client services were conceived and planned years ago. Cross-border e-commerce retail imports is a case in point. As early as in 2013 when cross-border e-commerce retail imports began to catch on in the mainland, we were already keeping close tabs on changes in the relevant policies and searching for possible opportunities. “Our formula for success is to stay alert and sensitive to market developments all the time and constantly explore ways to enhance our services in keeping with market changes.” Cheung advised Hong Kong companies to capitalise on their key advantages, saying: “Hong Kong companies’ strengths have always been their flexibility and international outlook. They should capitalise on Hong Kong’s advantages as one of the world’s freest economies as well as strong global connections to provide clients with world-class custom-made services. “For the logistics industry in particular, it should be noted that the Outline of the 14th Five-Year Plan for the National Economic and Social Development and the Long-Range Objectives Through the Year 2035 specifies that support will be rendered to Hong Kong to raise its status as a centre of international finance, shipping and trade, and an international aviation hub.3Good opportunities will also arise from the development of the Guangdong-Hong Kong-Macao Greater Bay Area and Regional Comprehensive Economic Partnership (RCEP). Hong Kong companies that can maintain their agility and international horizon will certainly be able to seize the upcoming opportunities and scale new heights.”  

      Source: HKTDC Research

  • India
    • India Further Extends Various Compliance Deadlines

      The Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC) have extended the filing and/or payment deadlines of various tax returns and forms, including income tax returns for the assessment year (AY) 2021/22, in view of various difficulties reported by taxpayers and stakeholders.

      Direct tax

      The filing deadline of the following returns and reports have been extended further:

      • income tax return for the AY 2021/22:
        • due on 31 July 2021: from 30 September 2021 to 31 December 2021;
        • due on 31 October 2021: from 30 November 2021 to 15 February 2022; and
        • due on 30 November 2021: from 31 December 2021 to 28 February 2022;
      • belated/revised income tax return for AY 2021/22 due on 31 December 2021: from 31 January 2022 to 31 March 2022;
      • report of audit for the previous year (PY) 2020/21 due on 30 September 2021: from 31 October 2021 to 15 January 2022; and
      • report from an accountant for persons entering international transactions or specified domestic transactions for PY 2020/21 due on 31 October 2021: from 30 November 2021 to 31 January 2022.

      Vivad Se Vishwas Scheme

      The last day of payment under the Vivad Se Vishwas Scheme (without any additional amount) has been extended further from 31 August 2021 to 30 September 2021.

      Indirect tax

      • The last day of availing the late fee amnesty scheme for failure to furnish Form GSTR-3B for the tax periods July 2017 to April 2021 has been extended from 31 August 2021 to 30 November 2021.
      • The last day of application for revocation of cancellation of registration where the due date of filing the application falls between 1 March 2020 and 31 August 2021 has been extended to 30 September 2021.
      • The last day of filing FORM GSTR-3B and FORM GSTR-1/IFF by companies using electronic verification code instead of a digital signature certificate has been extended to 31 October 2021.

      The due date for the following submissions have also been extended/further extended, as applicable:

      • application under section 10(23C), section 12A, section 35(1)(ii), section 35(1)(iia), section 35(1) (iii) and section 80G in Form 10A due on 30 June 2021: extended further from 31 August 2021 to 31 March 2022;
      • application under section 10(23C), section 12AB, section 35(1)(ii), section 35(1)(iia), section 35(1) (iii) and section 80G in Form 10AB due on 28 February 2022: extended to 31 March 2022;
      • equalization levy statement in Form No. 1 for the FY 2020/21 due on 30 June 2021: extended further from 31 August 2021 to 31 December 2021;
      • quarterly statement in Form No. 15CC:
        • for the quarter ended 30 June 2021: extended further from 31 August to November 2021; and
        • for the quarter ending 30 September 2021: extended from 15 October to 31 December 2021;
      • uploading of declarations received from recipients in Form No. 15G/15H:
        • for the quarter ended 30 June 2021: extended further from 31 August to 30 November 2021; and
        • for the quarter ending 30 September 2021: extended from 15 October to 31 December 2021;
      • intimation to be made by a sovereign wealth fund in Form II SWF or a pension fund in Form No. 10BBB:
        • for the quarter ended 30 June 2021: extended further from 30 September to 30 November 2021; and
        • for the quarter ending 30 September 2021: extended from 31 October to 31 December 2021; and
      • intimation by a constituent entity, resident in India, of an international group, the parent entity of which is not resident in India in Form No.3CEAC; report by a parent entity or an alternate reporting entity or any other constituent entity, resident in India in Form No. 3CEAD; and intimation on behalf of an international group for the purposes of the proviso to sub-section (4) of section 286 of the Income Tax Act in Form No. 3CEAE: extended from 30 November 2021 to 31 December 2021.
    • Insolvency And Bankruptcy Code Reforms – With a focus on Pre-packaged insolvency resolution process

      Since the Insolvency and Bankruptcy Code was enacted in 2016, it has aided higher realizations of debt and quicker recovery of businesses. The Code has had a positive impact of freeing up capital which was stuck in failed businesses and has allowed companies, on the brink of collapse, to rise and become successful again, thereby also saving jobs.

      The government has proactively monitored the implementation of the code and made prompt amendments as and when required to keep it relevant and sensitive to the constantly changing needs of the market. Underscoring this, the government took prompt action to alleviate the impact of Covid-19 on Indian businesses by suspending insolvency proceedings arising for any default occurring during the period from 25th March 2020 to 24th March 2021.

      Micro, Small & Medium Enterprises (MSMEs) are a major driver of the Indian economy as significant contributors to the GDP and employment generation. To alleviate the impact faced by the MSME sector due to the pandemic, the government promulgated an Ordinance in April 2021 to introduce pre-packaged insolvency resolution process for MSMEs. This is to augment the existing Corporate Insolvency Resolution Process (CIRP) and provide an efficient alternative insolvency resolution process for MSMEs under the IBC to ensure quicker, cost-effective and value maximising outcomes for all the stakeholders, in a manner which is least disruptive to the continuity of their businesses, and which preserves jobs. The Ordinance was ratified as a law on Parliament on the July 28, 2021.

      The pre-packaged insolvency resolution process (PIRP) can be initiated by a corporate debtor, classified as an MSME, who has a default amount of at least one lakh rupees. Once the proceedings under the PIRP begin, the debtor is required to submit the base resolution within two days of commencement of the PIRP. To increase the speed and efficiency of insolvency proceedings against MSMEs, a resolution plan must be approved by the creditors with at least 66% of the voting shares within 90 days from the commencement of PIRP. The approved resolution plan will finally be examined and approved by the National Company Law Tribunal. As a safeguard to ensure timely resolution, the committee of creditors may decide with at least 66% voting share to terminate the PIRP and initiate the CIRP at any time after the PIRP commencement date but before the approval of the resolution plan.

      The PIRP amendments have been brought in to provide relief to honest MSME owners who have been severely impacted by the pandemic, by trying to ensure quicker, cost-effective and value maximising outcomes for all stakeholders. Furthermore, to ensure continuity of businesses for MSMEs the resolution process will be carried out while the company remains with the proprietor unless there has been fraudulent conduct or gross mismanagement.

      The amendments are expected to reduce process costs, ensure continuity of business operations which benefit the corporate debtor and most importantly maximise the asset realisation for financial creditors. These reforms are expected to further improve the Ease of Doing Business and ensure quick resolutions for honest MSMEs – the backbone of the Indian economy.

      Source: Invest India

    • Textile Machinery Industry in India

      Textile Machinery Industry Overview

      • A ~$2.5 bn textile machine industry which is growing at 5% currently reflects on the growing strength of this sub-segment in the textiles value chain in India.
      • A strong textile engineering industry that can grow, compete, and export would be able to provide support to the rising Indian textile industry, adding vibrancy and competitiveness.
      • There are about 3,250 companies involved in the manufacturing of textile machineries, accessories, and trading of equipment in India. The industry not only caters to rising domestic demand but also has the potential to establish India as an export hub for textile machinery with spinning machines representing the largest export opportunity.
      • A major component of the textile machinery industry in India thrives on the global partnerships that companies in India have forged with their global counterparts be it in Germany, Italy, or Japan.
      • As per the 60th Annual Report by the Textile Machinery Manufacturing Association (TMMA), the Asian region will account for more than 90% of the total textile machinery market share, and in order to expand its technical horizons, many textile machine companies in the country are joining hands with their western counterparts to produce technologically advanced machines.
        Access report here Textile Machinery Industry in India
  • Switzerland
    • Switzerland – Swiss Reject Initiative to Tax Passive Income at Higher Rates

      Nearly two-thirds of Swiss voters have rejected an initiative to tax passive income — possibly including all capital gains — at 150 percent of the rate normally applicable to an individual taxpayer's income.

      Nearly two-thirds of Swiss voters have rejected an initiative to tax passive income — possibly including all capital gains — at 150 percent of the rate normally applicable to an individual taxpayer's income.

      Just under 65 percent of voters and all 26 cantons voted against the measure September 26. The Swiss Socialist Youth Party, which proposed the initiative, said it was needed because tax breaks for the richest 1 percent have led to a record level of inequality in recent years.

      Initiatives are put to a vote in Switzerland if at least 100,000 voters sign a petition supporting the proposed measure. If the initiative involves a constitutional issue, it must be approved by majorities of those casting ballots and of the country’s 26 cantons.

      Finance Minister Ueli Maurer reportedly told a news conference that the vote demonstrated that a majority of Swiss voters are content with the existing tax regime. The Swiss Broadcasting Corp. quoted Maurer as saying that the combination of progressive income tax rates, wealth tax, and social security benefits is "obviously sufficient to prevent a further opening of the gap between the rich and the less well-off."

      The Swiss Bankers Association, which campaigned against the initiative, welcomed the result, saying it would have hurt many small- and medium-size companies, start-ups, small investors, and homeowners. “As the Federal Council explained in the run-up to the referendum, the heavier taxation of income from invested capital would have detracted from Switzerland’s international appeal as a business location and reduced incentives to save, both of which are key drivers of the Swiss economy,” the association said September 26. “The rejection of the initiative can be seen as a sign that Switzerland’s population has faith in its existing tax system. One of the main reasons cited for voting against the initiative was the fact that its wording was open to interpretation, making the impact on the economy and society . . . hard to gauge.”

    • Switzerland is extraordinarily successful as a biotech hub and globally connected

      Switzerland is one of the most attractive locations for biotech companies and benefits from a very high influx of venture capital. At the same time, Switzerland has excellent prerequisites for further expanding its strong position in manufacturing complex biopharmaceuticals, as illustrated by numerous reports, presentations and panel discussions at the leading Swiss biotech industry conference.

      At the Swiss Biotech Day, KPMG presents its latest report «Site Selection of Life Sciences Companies in Europe». The study analyzes the attractiveness of European countries as locations for pharmaceutical, biotech and medtech companies. «Switzerland is an attractive location in important comparative categories such as the size of the cluster, attractiveness for qualified employees and competitive taxes. However, the EU is also investing heavily in expanding the life sciences industry. Thus, competition for investments and talent are likely to increase further» explains André Guedel, expert in site evaluation at KPMG Switzerland. Economic parameters such as general competitiveness and innovation power, the financing environment, or the size of the talent pool are critical when choosing a location for biotech companies. Quality of life and a general work-life balance, R&D infrastructure and political stability also play a major role.

      A global leader with a long list of successes

      Thanks to this excellent environment coupled with continuous investments in research and the strong ability to innovate, the Swiss biotech industry has been one of the leading biotech hubs for many years. Together with the pharmaceutical industry it contributes to more than 40 percent of Swiss exports.

      Brought to public attention by the Covid pandemic, the biotech industry has become very popular among investors. «By July 2021, investors invested around 2 billion Swiss francs in Swiss biotech companies. 80 percent thereof was raised by IPOs and companies listed on the stock exchange. In the first seven months of this year alone, five Swiss biotech companies successfully went public» says Jürg Zürcher, expert and EY Senior Advisor Biotechnology, in his update on this year’s Swiss Biotech Report.

      The success stories of Bachem, Basilea, Esbatech, Lonza or Novimmune demonstrate the broad-based success of this industry. Consequently, these companies are honored with a «Swiss Biotech Success Stories Award» at the Swiss Biotech Day. In his keynote address, Roger Nitsch, CEO of Neurimmune, explains the important role Switzerland plays in the development of new drugs, such as Aducanumab. Aducanumab has recently been approved by the U.S. Food and Drug Administration for the treatment of Alzheimer’s disease. It was discovered by Neurimmune in collaboration with the University of Zurich and will be marketed by Biogen. Biogen will produce Aducanumab at its new manufacturing site in Luterbach in the canton of Solothurn.

      International cooperation as the key to success

      The fact that Switzerland is a major player in biotechnology is also reflected in its important contribution to combat the Covid pandemic. However, the performance of individual countries is not critical to overcoming the pandemic, as Michael Altorfer, CEO of the Swiss Biotech Association, emphasizes: «The success in developing new vaccines, diagnostics and a growing range of therapeutic options are ultimately the result of a fantastic international cooperation.»

      Paradoxically, this cooperation is suddenly under severe pressure at a time of its greatest success. A wide variety of countries have realized how dependent they are on global supply chains, which have proven to be politically susceptible under time and demand pressures. Many countries therefore wish to become more independent in the development and production of active ingredients for their own supply and to establish their own supply chains. The retreat to national supply chains and national, isolated research programs would be a massive set-back for global research networks. As Switzerland only has a very small local market it can focus and dedicate its capacity to the needs of foreign countries and thus has the opportunity to further expand its strong position in pharmaceutical manufacturing for the world.

      Switzerland as a global producer of biopharmaceuticals and novel therapies

      The competitive advantages of Switzerland, such as global networks, highly qualified talent, political stability and neutrality are being used by both multinational pharma companies as well as contract manufacturers to produce highly complex biopharmaceuticals and products in the field of novel gene and cell therapies. The rapid expansion of companies such as Lonza, Bachem, Siegfried, Dottikon and Celonic, demonstrate the potential of Switzerland to produce for a global demand. «The Swiss biotech and pharma industry covers the entire value chain and has significant – and growing – production capacities. For example, Merck has invested more than 400 million Swiss francs in new production capacities in Switzerland over the past two years, Biogen more than 1 billion Swiss francs in its site in Luterbach, and Lonza has built three new vaccine production lines in Visp,» emphasizes Michael Altorfer.

      Well equipped for the future

      In conclusion, Switzerland is well equipped for the future. Next to the expansion of industrial parks and production facilities, Switzerland offers a broad-based commitment to strong patent protection, a well-filled product pipeline and a strong start-up scene, which has contributed significantly to industry growth, as Jordi Montserrat, CEO of Venturelab, confirms at the Swiss Biotech Day: «The life sciences alumni of Venturelab and Venture Kick are among the biggest Swiss success stories in this area and have attracted several billion Swiss Francs in investments.»

      You can read more and download Swiss Biotech Report 2021 here

    • Switzerland remains a global innovation leader

      Switzerland has once again topped the Global Innovation Index for this year. In so doing, the world intellectual property organization has determined that no coronavirus-related slump has been observed in relation to financing innovation.

      Switzerland has successfully defended top spot in the Global Innovation Index, further details of which can be found in a press release issued by Wipo, the World Intellectual Property Organization. As was the case in the previous year, the places immediately behind Switzerland are again occupied by Sweden, the USA and the UK. Having previously taken 10th place, South Korea has risen five places to claim 5th spot. However, Germany fell one place to 10th in this year’s rankings, although France (12th up to 11th) and Austria (19th up to 18th) both recorded an improvement of one place respectively.

      Sectoral variations

      Despite the coronavirus crisis, global innovation investments have proved to be highly resilient, Wipo writes in the press release. However, industry-related differences have been observed over the past year. In this respect, companies operating in the fields of IT and electronics as well as pharma and biotechnology firms have scaled-up their investment activities, while companies from sectors including tourism have evidently been impacted by the crisis to a greater extent.

      Switzerland boasts huge number of patents

      Switzerland topped not only the overall rankings but also the assessment for Europe and high-income countries. In the overall rankings, Switzerland took top spot for the eleventh year in succession, with this excellent record primarily attributable to the country’s huge number of patents. In the Knowledge and Technology Output category, Switzerland is again ranked first on a global basis in addition to taking second place for both the Creative Output and Infrastructure categories. However, in terms of Institutions, Switzerland ranks down in 13th place. In the current edition of the index, Switzerland’s strengths are noted in particular as its political framework conditions, the use of IT applications and knowledge creation. For the latter two categories here, Switzerland is again ranked first globally.

      This year, Wipo produced the fourteenth edition of the Global Innovation Index in conjunction with the Portulans Institute and several other partners. For this, more than 130 countries around the world are evaluated in a process that takes into account data related to just over 80 indicators.

    • UK and Switzerland strike deal to secure healthcare access and other benefits for citizens living and travelling abroad

      The UK and Switzerland have signed a landmark agreement which will benefit citizens who live and work abroad in either country.

      • UK and Switzerland deal will ensure citizens living or working in either country can receive healthcare and an uprated state pension
      • UK and Swiss citizens will have access to necessary healthcare when visiting either country

      The UK and Switzerland signed a landmark agreement today which will benefit citizens who live and work abroad in either country by ensuring they are able to receive healthcare cover and uprated state pensions, amongst other social security entitlements. It will also allow eligible individuals travelling to either country to access necessary healthcare when abroad using a European Health Insurance Card (EHIC) or its UK successor, the Global Health Insurance Card (GHIC).

      The Convention on Social Security Coordination, which benefits citizens of both countries also supports business and trade by ensuring that cross-border workers and their employers are only liable to pay social security contributions in one state at a time.

      Foreign, Commonwealth and Development Office Minister, Nigel Adams who signed the agreement today said:

      I am pleased to be able to sign the UK-Switzerland Convention on Social Security Coordination. This will help give people certainty over their future incomes, ensure our citizens can continue to receive reciprocal healthcare and support business and trade links between our two countries.

      The agreement covers a wide range of social security benefits for eligible individuals. Those living abroad in either country will be able to receive healthcare, uprated pensions and other benefits. This includes healthcare cover for UK state pensioners, those exporting maternity allowance, and certain categories of cross-border workers.

      The Convention will come into force later in the year.

      Source: Foreign, Commonwealth & Development Office

  • United Arab Emirates
    • UAE Ministers announce the first set of ‘Projects of the 50’

      UAE ministers have announced the first set of bold strategic projects aimed at fostering the UAE’s new phase of growth – both domestically and internationally – and embarking on an ambitious growth strategy as the nation celebrates its golden jubilee and embarks on the 50 years to come.

      The "Projects of the 50" is a series of developmental and economic projects that will be rolled out throughout September, which aim to accelerate the UAE’s development and consolidate into a comprehensive hub in all sectors and establish its status as an ideal destination for talents and investors.

      In a press conference held on Sunday, UAE ministers and senior officials announced the first set of projects, which include new and amended visa schemes, comprehensive global campaigns to attract foreign investment, national initiatives to support emerging Emirati companies and boost the quality of national products, partnerships with major economies across the world, and programmes to support the applications of the Fourth Industrial Revolution in all sectors. All of these projects seek to establish the UAE as a global nation and a testbed for technologies and innovation.

      The ministers and officials who spoke at the conference on Sunday were: Mohammad bin Abdullah Al Gergawi, Minister of Cabinet Affairs; Dr Sultan Al Jaber, Minister of Industry and Advanced Technology; Abdullah bin Touq Al Marri, Minister of Economy; Omar bin Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Teleworking Applications; Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade; Sarah bint Yousif Al Amiri, Minister of State for Advanced Sciences; and Saeed Al Eter, Chairman of the UAE Government Media Office.

      Al Gergawi explained that the vision for the next 50 years is to make the UAE the global capital of investment and economic creativity, an integrated incubator for entrepreneurship and emerging projects, and an advanced laboratory for new economic opportunities.

      He stressed how the "Projects of the 50" provides impetus for investment in the digital and circular economies, and those based on the applications of artificial intelligence and the fourth industrial revolution.

      He said, "Over the past five decades, the UAE has opened its doors, ports, skies and economic sectors to become a destination for all, and we will continue on this path as we establish a pathway for 50 more years of development and opportunity. ‘Projects of the 50’ presents to the world a unified economic and investment identity for the next developmental stage in the UAE, establishing an agenda for the next 50 years based on development and opportunity."

      ‘Projects of the 50’ cover several key sectors including economy, entrepreneurship, advanced skills, digital economy, space and advanced technologies.

      The series of development and economic projects aim to accelerate the UAE’s economic growth and diversification to ensure a decent life for its citizens and residents, enhance both the public and private sectors, and build a brighter future for the next generations.

      Modernisation of visa and work permits One of the key legislative changes being introduced as part of "Projects of the 50" is a restructuring of the entry and residency system, which is being upgraded to confirm the UAE’s position as an ideal destination for work, investment, entrepreneurship, education and life.

      Among the package of new regulations is the introduction of the Green Visa, which expands the self-residency status to investors, entrepreneurs, highly skilled individuals, top students and graduates, and the federal freelancers visa for self-employed workers based in the UAE and overseas in specialised fields such as artificial intelligence, Blockchain and digital currencies.

      The new regulations also include expanding the Golden Visa eligibility to include managers, CEOs, specialists in science, engineering, health, education, business management and technology, while the pathway has been smoothed for highly skilled and specialised residents, investors, entrepreneurs, scientists, pioneers, leading students and graduates.

      New visa schemes include: Green Visa, which distinguishes between work permits and residencies, enables highly skilled individuals, investors, entrepreneurs and top students and graduates to sponsor themselves. Green Visa involves: - Sponsorship of young people until the age of 25 instead of 18 - Extending the grace period for leaving the country upon job loss or retirement to 90-180 days instead of 30.

      - Sponsorship of parents Freelancers Visa, which is the first federal scheme of its kind, and enables self-employers to sponsor themselves.

      Other specific regulatory changes include: - Extension of business trip permits from 3 months to 6 months - Sponsorship of parents under the visa of direct family members - One-year residency extension for humanitarian cases - Extension of children’s age limit on parents’ residency from 18 to 25 years - Extension of grace period upon job loss or retirement to 90-180 days The measures have been introduced to enhance the competitiveness and flexibility of the UAE labour market, facilitate sector growth, spur knowledge transfer and skills development, and create greater stability and security for residents.

      Comprehensive economic partnership agreements As part of the efforts to consolidate the UAE’s position as a main gateway for global trade and investment, the UAE Government is undertaking comprehensive economic partnership agreements with eight key global markets around the world. The agreements aim to achieve an AED40 billion annual increase to the UAE’s current AED257 billion trade volume with these markets.

      The agreements fall under the UAE's global economic partnerships strategy, which aims to double the size of the national economy from AED1.4 trillion to AED3 trillion over the next 10 years.

      The countries with which deals were signed are distinguished by large markets that constitute 10 percent of the world’s GDP, with an economic exchange among these countries worth $80 billion. Besides being home to 26 percent of the world’s population, the eight countries possess large markets with high demand for goods and services, in addition to strong trade and economic relations in their respective regions.

      The initiative will help develop the UAE’s network of trade and investment partners, ensure the flow and growth of Emirati trade with the world, and confirm the important role of the UAE in developing and facilitating global trade.

      In conjunction, the UAE Government also approved the "Higher Committee for Economic Agreements" to oversee the expansion of partnerships with new markets and seize new investment and economic opportunities to sustain the growth of the national economy.

      Abdullah bin Touq Al Marri, Minister of Economy , was appointed as the committee’s chairman, while Suhail Mohamed Al Mazrouei, the Minister of Energy and Infrastructure, has been appointed as the vice chairman.

      Committee members are: Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology; Obaid bin Humaid Al Tayer, Minister of State for Financial Affairs; Dr. Thani Al Zeyoudi, Minister of State for Foreign Trade; Ali Al Neyadi, Commissioner (Chairman) of Federal Customs Authority; Khaled Mohamed Balama, Governor of the UAE Central Bank; Khaldoon Khalifa Al Mubarak, member of Abu Dhabi’s Executive Council, Founding Chairman of the Executive Affairs Authority of the Government of Abu Dhabi and Group CEO of Mubadala; and Abdulla Al Basti, Secretary General of The Executive Council of Dubai.

      Digital initiatives to prepare for the UAE’s future The digital economy will be a major element of "Projects of the 50", reflecting the integral role that technologies and artificial intelligence will play in driving the country’s next phase of its development.

      UAE Data Law The UAE Data Law is the first federal law to be drafted in partnership with major technology companies. The law will empower individuals to control how their personal data is used, stored and shared in a move that aims to protect privacy of individuals and institutions and limit entities’ use of personal data for profit.

      100 Coders Every Day This programme aims to attract 3,000 coders every month to the country’s workforce, increasing the number of coders from 64,000 to 100,000 in 12 months, and to facilitate the establishment of programming companies in the UAE through a set of incentives and benefits.

      PyCon Summit As part of the nation’s drive towards a knowledge economy, the UAE will host "PyCon Summit", the largest programming summit to be held in the Middle East. The event, set to take place in the second half of 2022, will help develop digital talent and expertise, inspire innovative technology projects, and connect a global community of programmers with the public and private sectors, as well as academic institutions.

      The summit will bring together experts, leaders, talents, specialists and interests in the field from all over the world, and hold workshops, panel discussions and training sessions to showcase the latest trends and developments in programming and the digital economy.

      The Fourth Industrial Revolution Network to establish 500 national technology companies As part of the "Projects of the 50", the UAE Government launched the Fourth Industrial Revolution Network to promote the adoption of advanced technologies in the national industrial sector. The project, which aims to establish and grow 500 national companies equipped with the technologies of the Fourth Industrial Revolution, will be key in creating an attractive business environment to meet the needs of local and international investors, support the continuous growth of national industries, improve their competitiveness, and enhance the UAE’s position as a global destination for pioneering future industries with world-class infrastructure and a skilled and technologically advanced workforce.

      The network is designed to provide a platform that brings together 15 leading national companies in technology adoption to transfer knowledge, share best practices and train 100 CEOs in the industrial sector on the latest digital trends.

      Through the network, the Smart Industry Readiness Index will be developed to support the digital transformation of 200 industrial companies after evaluating the efficiency of digital operations.

      ADNOC, Strata, EDGE and Emirates Global Aluminium will be joined by leading global companies in technology development such as Siemens, Microsoft, Cisco and IBM to share successful implementation of advanced technology and applications of the Fourth Industrial Revolution.

      Enhancing the competitiveness of the UAE business environment As part of "Projects of the 50", the UAE Government has launched three initiatives designed to strengthen the UAE’s ability to keep pace with the ever-evolving global economy and consolidate its position as one of the world’s most attractive countries for foreign direct investment.

      10x10 The 10x10 program aims to achieve an annual increase in the country’s exports by 10 percent in 10 key markets: China, the UK, the Netherlands, Italy, Russia, Poland, Luxembourg, Australia, New Zealand and Indonesia.

      Through an integrated system of incentives and benefits, the project will work to achieve a 14 percent growth in cumulative foreign direct investment (FDI) outflow by 2030, and a growth of FDI directed to the targeted countries of 24 percent by 2030. The UAE Government has also announced the launch of a new electronic portal – – that will act as an umbrella for all investment-related local entities and 14 state economic entities and present all investment opportunities across the UAE. The portal will also provide comprehensive information on the local investment environment, as well as business and bank account set-up services. It will also highlight entrepreneurial success stories.

      This electronic platform is designed to showcase the UAE to major international companies and unicorn companies (billionaire companies), and encourage major global sovereign wealth funds to funnel investments to the country. It will also facilitate the identification of investors unable to invest in their own countries, open communication with them and incentivize the transfer of their investments to the UAE.

      The Emirates Investment Summit The UAE will host the Emirates Investment Summit, a global summit that will connect investment funds with the public and private sectors to create investment opportunities that will attract AED550 billion in FDI over the next nine years. Scheduled to take place during the first quarter of 2022, the Summit seeks to build lasting partnerships between public and private sectors.

      National In-Country Value Program One of the key elements of "Projects of the 50" is the adoption of the National In-Country Value Program at a federal level, which will facilitate the redirection of procurement and contract expenses to the local economy. The program reflects the UAE government’s commitment to enhancing the competitiveness of the national economy, promoting domestic products and supporting local small and medium-sized companies.

      By 2025, the program aims to create a demand for local products and services by redirecting more than 42 percent of procurement of the federal government and major UAE companies to local products and services, gradually implementing the program through 45 federal entities and 15 major national companies, and increasing local suppliers from 5,000 to 7,300.

      It aims to contribute to advancing the economic and social development of the country by redirecting more than 50 percent of the spending of government agencies and national companies on purchases and services to the national economy by 2031. It will seek to raise the procurement volume from AED33 billion to AED55 billion by 2025 and to provide competitive financing solutions to local suppliers.

      Implemented under the supervision of the Ministry of Industry and Advanced Technology, the program will enable the UAE to reduce its dependence on imports in priority sectors, localize supply chains, support the national industrial sector and increase manufacturing and industrial output.

      The program will also encourage the industrial sector to adopt the advanced technologies and solutions of the Fourth Industrial Revolution to improve production capacity and elevate product quality. In addition, it will motivate suppliers and international companies to increase spending on research and development, increasing the competitiveness of local products.

      The program was first adopted in Abu Dhabi in 2018, and resulted in the redirection of nearly AED88 billion to the local economy, while the number of approved suppliers exceeded 5,000 in various sectors.

      UAE allocates AED5 billion to support Emirati projects To help facilitate the goals of "Projects of the 50", the UAE Government has announced Project 5Bn, which involves the allocation of AED5 billion to support Emirati projects in priority sectors.

      The AED5 billion is part of the Emirates Development Bank’s April 2021 allocation of AED30 billion to help accelerate industrial development, adopt advanced technology, and support entrepreneurship and innovation by 2025 – all to support its wider mission of increasing productivity, enhancing the industrial sector’s contribution to GDP and creating job opportunities for UAE’s citizens.

      Supporting emerging Emirati businesses follows a forward-looking vision to diversify the economy and improve competitiveness, considering that SMEs in the UAE constitute a major part of the national economy.

      Tech Drive to support Fourth Industrial Revolution in the industrial sector The UAE Government launched "Tech Drive", a AED5 billion programme to support advanced technology adoption in the industrial sector. Established in partnership with the Emirates Development Bank, the fund will support the industrial sector’s shift towards the applications of the Fourth Industrial Revolution over the next five years. It will also provide programmes and incentives to support entrepreneurs in the industrial sector, aiming to achieve a AED25 billion contribution to the GDP and raise productivity by 30 percent.

      Through providing the necessary financing for companies and industrial institutions seeking to adopt the applications of the Fourth Industrial Revolution, Tech Drive aims to establish an attractive business environment for local and international investors and support the growth of national products.

      The fund’s packages include financial and non-financial programs, direct and indirect lending, capital investment in emerging and small and medium-sized companies, and advisory and guidance services. Tech Drive operates as part of the efforts to advance the UAE’s economic diversification and industrial transformation.

      Source: Ministry of Cabinet Affairs

    • United Arab Emirates – U.A.E. Notes Position in Tax Administration Cooperation Forum

      UAE Elected Vice President of Belt and Road Initiative Tax Administration Cooperation Forum for 2nd Time in a Row

      • In-depth discussion to intensify tax digitalization efforts.
      • The forum gathered high-profile participants from 57 countries including tax authority officials and executives.

      Abu Dhabi, September 18, 2021 — The United Arab Emirates was elected for the second time in row as Vice President of the Belt and Road Initiative Tax Administration Cooperation Forum (BRITACOF) in its second edition, during the meetings that brought together participants from 57 countries around the world.

      The UAE's delegation participated in the Supervisory Board meeting, where the President and the Vice President of the Forum were elected. The United Arab Emirates — represented by FTA Director General His Excellency Khalid Ali Al Bustani — was elected Vice President of the Forum for the second time after being elected in the first meeting of the Supervisory Board in China in April 2019.

      The Second Belt and Road Initiative Tax Administration Cooperation Forum (BRITACOF) and the accompanying virtual exhibition discussed ways to collaborate on tax administration coordination between the Belt and Road initiative states — particularly when it comes to harnessing digitalization to develop the sector.

      The three-day forum, which was conducted via videoconferencing, discussed the prospects of the digital economy and explored ways to build an integrated digitalized tax system, relying on digital tax management, enhancing digital tax services, and discussing the use of modern technologies in tax transactions, including Blockchain and Artificial Intelligence (AI). Big Data was also discussed as a means to facilitate tax procedures and increase resilience in the tax industry. In addition, the forum showcased ways to modernize tax data management, exchange tax information, develop control frameworks, and enhance tax data security.

      Speaking at the Forum, H.E. Al Bustani showcased the UAE's pioneering experience and the FTA's extensive efforts to continuously upgrade the tax system, ensure transparency, and streamline procedures.

      His Excellency underlined the FTA's achievements in implementing a fully electronic tax system that encourages voluntary compliance, offering a wide range of advanced services to taxpayers, including registration in the tax system, submitting Tax Returns, and settling their due taxes. The system allows Taxable Persons or their representatives to quickly complete all procedures without physical interaction or paper documents, which helps preserve public health and maintain social distancing.

      The FTA is keen on maintaining uninterrupted communication with stakeholders across the tax system, whereby its call centre answers hundreds of thousands of enquiries over the phone or via email.

      The Federal Tax Authority explored the experiences and success stories showcased by various member states at the Second Belt and Road Initiative Tax Administration Cooperation Forum and exhibition.

      The Authority asserted that the event is an opportunity to further optimise tax collaboration to remove barriers to trade, investment, and economic cooperation, setting the stage for deeper tax collaboration among countries of the Belt and Road Initiative.

    • Dubai Chamber members’ exports to Eastern Africa grow by 2.4% in first six months of the year

      Exports of members of Dubai Chamber to Eastern Africa grew by 2.4% in the first six months of the year, according to new trade figures released by the Chamber. The latest statistics also s that there is an estimated untapped potential of over USD2.9 billion, equivalent to 78% of the current export level.

      The Chamber said it issued a total of 9,134 Certificates of Origin (COOs) for Eastern Africa-bound shipments from January to June 2021, with the certificates having a total declared value of USD892 million (AED3.3 billion). The current level is more than double the value of exports to the sub-region from a decade ago.

      Releasing the figures ahead of the Global Business Forum Africa, which takes place from 13-14 October on the sidelines of Expo 2020 Dubai, Dubai Chamber said they show the investment potential of the 20 countries that make up the Eastern Africa region.

      According to Dubai Chamber’s figures, the top five best-performing markets in the sub-region, Kenya, Uganda, Tanzania, Zambia and Burundi, added a cumulative USD78.6 million to its members’ exports in the first half of this year compared to a year ago.

      The statistics also show that in 2011, Ethiopia dominated the Eastern Africa region with a 48% share in the total declared value, followed by Kenya at 14%, Tanzania at 9%, Djibouti with a share of 7%, and then Uganda at 6%. A decade later the position of these five markets remained the same, but with the distribution of their shares more balanced. The total declared value of Ethiopia in 2021 is estimated at 36%, Kenya and Djibouti at 17% each, Uganda at 8% and Tanzania at 7%.

      Kenya dominates the East African region both in size and untapped potential, with the latter estimated at USD573 million. Ethiopia is in second place with an untapped potential of USD450 million and Tanzania third with a gap of USD366 million. Other markets with high untapped export potential include Djibouti (USD345 million), Somalia (USD279 million), Mozambique (USD 148 million), Uganda (USD140 million) and Zambia (USD125 million).

      In terms of products that have been identified (as per ITC estimates) as having a high untapped export potential for UAE exporters and re-exporters in Eastern Africa, there are significant gaps for cane and beet sugar, motor vehicles, iron and steel structures, jewellery, copper wire and rice, among others.

      The opportunities being availed by Eastern Africa Markets will be put under the spotlight at the Global Business Forum Africa (GBF Africa), to be held in Dubai next month under the theme ‘Transformation Through Trade.’ Among the topics to be discussed are how African countries can work together to deliver on the promise of the African Continental Free Trade Area, models for innovative and sustainable trade, and the resilience of the continent’s emerging businesses.

      As the Official Business Integration Partner for Expo 2020 Dubai, Dubai Chamber is running a series of commerce and trade initiatives throughout the six months of Expo 2020 Dubai, with GBF Africa the first of its flagship global business forums. GBF Latin America will follow, along with GBF ASEAN set to be held for the first time. The chamber is also hosting the 12th World Chambers Congress at the event, with the expected participation of 14,000 chambers of commerce from 100 countries.

      Source: Government of Dubai - Media Office

    • Dubai’s external trade surges 31% to AED722 billion in H1 2021

      Emirate’s exports grow 45% to reach AED109.8 billion

      Hamdan bin Mohammed: Accelerated pace of external trade growth reflects Dubai’s growing global role in facilitating and streamlining worldwide trade and supply chains

      Sultan bin Sulayem: We are moving ahead with confidence to increase Dubai’s global trade volumes to AED2 trillion

      Dubai’s non-oil external trade surged 31% in the first half of 2021 to reach AED722.3 billion from AED550.6 billion in the corresponding period in 2020. Exports grew 45% year on year (YoY) in H1 2021 to AED109.8 billion from AED75.8 billion, which supports the goal of the 10 x 10 programme (one of the nation’s ‘Projects of the 50’ initiatives) to increase the UAE’s exports to 10 global markets by 10% annually. Imports rose by 29.3% YoY to AED414 billion from AED320 billion. Re-exports grew 28.3% YoY to AED198.6 from AED154.79. His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council, said Dubai, guided by the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has reinforced its status as one of the world’s fastest growing business hubs. His Highness said: “This marked growth in trade demonstrates the success of Dubai’s strategic plan to consolidate its position as a global logistics and trade hub that connects the world’s diverse markets. Dubai’s existing sea and air network will be expanded to cover 200 new cities around the world. We are confident that we will continue to build on our growth momentum to achieve our ambitious sustainable development projects and plans.” His Highness added: “The accelerated pace of external trade growth also reflects Dubai’s growing global role in facilitating and streamlining worldwide trade and supply chains. With Dubai all set to receive delegates from 191 nations at EXPO2020, the emirate’s outstanding trade performance further raises its profile as a trading powerhouse.” The volume of Dubai’s non-oil external trade in the first half of 2021 rose 10% to 48 million tons compared to 43.7 million tons in H1 2020. Exports skyrocketed 30.8% YoY to reach 10.1 million tons. Re-exports totalled 7 million tons growing by 10.6%, and imports rose by 4.25% to 31 million tons. Sultan bin Sulayem, DP World Group Chairman & CEO and Chairman of Ports, Customs and Free Zone Corporation, said: “This growth in trade reaffirms Dubai’s ability to turn challenges into opportunities based on strategic plans that leverage the stability and flexibility of its economy. Dubai is at the forefront of international economic recovery and we are on track to increase our global trade to AED2 trillion in the coming years. Trade is turning into the main growth catalyst of the economy of the UAE and Dubai under the guidance of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. We continue to raise our commitment to developing customs services according to the evolving needs of businesses and investors and build more trade bridges to reach out to new markets.” Bin Sulayem added: “Furthermore, Dubai’s World Logistics Passport (WLP) initiative is helping to reimagine how goods and services move around the globe, boost resilience in global supply chains and remove the barriers that prevent developing economies from trading as freely as they might. We are happy that 10 new countries have joined the world’s first logistics loyalty programme that brings together airport authorities, port operators and shipping agents.. This incentive-based loyalty programme enables freight forwarders, traders and business owners to draw the maximum possible benefits from their trading operations, which can be translated to an increase of 5% to 10% in revenues.” Ahmed Mahboob Musabih, CEO of Ports, Customs and Free Zone Corporation, Director General of Dubai Customs said: “Standing true to our slogan: Gateway to Dubai’s Prosperity, we keep developing and investing in advanced technologies to deliver the best smart customs services globally that add tangible value to our clients.” The advanced systems at Dubai Customs completed 12.7 million customs declarations in eight months; an average of 55,000 daily. Customs transactions in H1 2021 grew 53.4% to 11.2 million. China maintained its position as Dubai’s biggest trading partner in H1 2021 with AED86.7 billion worth of trade compared to AED66.3 billion in H1 2020, up 30.7% YoY. Trade with India grew 74.5% YoY to AED67.1 billion from AED38.5 billion. Trade with the USA amounted to AED32 billion up 1% YoY from AED31.7. Saudi Arabia came fourth with AED30.5 billion up 26% YoY from AED24.1 billion, followed by Switzerland with AED24.8 up 2.3% YoY from AED 24.2 billion. The total share of the five biggest trade partners in H1 2020 amounted to AED241.21 billion compared to AED185.06 billion in H1 2020, up 30.34%. Gold topped the list of commodities in Dubai's H1 external trade at AED138.8 billion (19.2% of Dubai trade), followed by telecoms at AED94 billion (13%). Diamonds came third in the list at AED57.3 billion (8%), followed by jewelry at AED34.1 billion (4.7%), and vehicle trade at AED28 billion (4%). Direct trade in H1 2021 totalled AED445.6 billion, up 39.5%, while trade through free zones reached AED272 billion, up 19.8%. Customs warehouse trade weighed in at AED4.5 billion, up 8.1%. Airborne trade accounted for AED364.8 billion, jumping 46.15% from AED249.6 billion in H1 2020. Sea trade reached AED247.5 billion, up 16.7% compared to AED212.18 billion, while land trade touched AED110 billion, up 23.7% compared to AED88.8 billion.

      Source: Government of Dubai - Media Office

  • United Kingdom
    • Boris Johnson Announces 1.25% Rise in Dividend Income Tax and National Insurance Contributions in 2022

      During his speech in the House of Commons taking place on 7 September 2021, the United Kingdom (UK) Prime Minister, Boris Johnson, announced the country's plan ("Building Back Better") to financially support social care and the UK's National Health Service (NHS), in light of the adverse effects of the ongoing COVID-19 pandemic. The plan consists of the following tax measures:

      • a 1.25% increase in Class 1 (i.e. employee) and Class 4 (i.e. self-employed, including partners) national insurance contributions (NICs), applying to the main and higher rates; and
      • a 1.25% increase in dividend income tax rates.

      The aforementioned increases will take effect as from April 2022.

      According to an illustrative impact modelling assessment effectuated by the HM Treasury and presented in a policy paper published today, the Building Back Better plan will result in:

      • lower-income households being the large net beneficiaries, with the poorest households gaining the most (as a proportion of income);
      • the 20% highest income households contributing more than 40 times what the 20% lowest income households will have contributed; and
      • over 1/3 of the overall tax increases (and over 1/2 of the increase in dividend income tax rates) coming from the top 10% of the UK households, with the majority coming from the top 20% of UK households.
    • UK and Switzerland strike deal to secure healthcare access and other benefits for citizens living and travelling abroad

      The UK and Switzerland have signed a landmark agreement which will benefit citizens who live and work abroad in either country.

      • UK and Switzerland deal will ensure citizens living or working in either country can receive healthcare and an uprated state pension
      • UK and Swiss citizens will have access to necessary healthcare when visiting either country

      The UK and Switzerland signed a landmark agreement today which will benefit citizens who live and work abroad in either country by ensuring they are able to receive healthcare cover and uprated state pensions, amongst other social security entitlements. It will also allow eligible individuals travelling to either country to access necessary healthcare when abroad using a European Health Insurance Card (EHIC) or its UK successor, the Global Health Insurance Card (GHIC).

      The Convention on Social Security Coordination, which benefits citizens of both countries also supports business and trade by ensuring that cross-border workers and their employers are only liable to pay social security contributions in one state at a time.

      Foreign, Commonwealth and Development Office Minister, Nigel Adams who signed the agreement today said:

      I am pleased to be able to sign the UK-Switzerland Convention on Social Security Coordination. This will help give people certainty over their future incomes, ensure our citizens can continue to receive reciprocal healthcare and support business and trade links between our two countries.

      The agreement covers a wide range of social security benefits for eligible individuals. Those living abroad in either country will be able to receive healthcare, uprated pensions and other benefits. This includes healthcare cover for UK state pensioners, those exporting maternity allowance, and certain categories of cross-border workers.

      The Convention will come into force later in the year.

      Source: Foreign, Commonwealth & Development Office

    • UK Government Defers Making Tax Digital for Income Tax

      The government is extending the requirement to operate Making Tax Digital (MTD) to the 4.2m taxpayers with business and/or property income over £10,000, including landlords, sole traders and partnerships, for their Income Tax obligations. These changes will apply to businesses, self-employed individuals and landlords who have profits chargeable to Income Tax and pay Class 4 National Insurance contributions (NICs).

      General description of the measure

      Making Tax Digital (MTD) is the first phase of the move towards a modern, digital tax service fit for the 21st century. It supports businesses through their digitalisation journey and provides a digital service that many have come to expect in their everyday lives. MTD and its extension forms a crucial building block in the government’s 10-year strategy, ‘Building a trusted, modern tax administration system’, published 21 July 2020, to make the tax system more resilient and effective, to boost business productivity, and better support taxpayers. The Government recognises the challenges faced by many UK businesses as the country emerges from the pandemic over the last year. In recognition of this and of stakeholder feedback, we will now be introducing MTD ITSA a year later, in April 2024 instead of April 2023. MTD ITSA builds on the successful introduction in April 2019 of MTD for those VAT-registered businesses with taxable turnover above the VAT threshold and will follow the introduction of MTD for VAT-registered businesses with turnover below the VAT threshold from April 2022. There is a growing body of evidence, from research and insights from taxpayers already operating MTD VAT, which demonstrates that MTD is securing a range of benefits for those that use it in practice. MTD users are reporting that preparing and submitting returns is easier, and that MTD has increased their confidence in managing tax affairs and using technology. Over a quarter of VAT-registered businesses below the VAT threshold have voluntarily chosen to join MTD VAT, demonstrating that a modern, digital approach to managing tax can work for businesses of every size. Many of these businesses will also have Income Tax obligations and will be keen to operate MTD ITSA. Under MTD, businesses must keep digital records and use third-party software to submit their tax returns to HM Revenue and Customs (HMRC). Under the changes, those mandated to use MTD ITSA will need to keep records of their income and expenditure digitally and send a quarterly summary of income and expenses, and an end of year report, using MTD compatible software (or applications). The software these businesses use must be MTD enabled, and capable of receiving information from HMRC digitally via HMRC’s Application Programming Interface (API) platform. More information can be found at Making Tax Digital (MTD) – Customer Costs and Benefits for the Next Phases of MTD where the impacts, costs and benefits to businesses and individuals of the next phases of MTD expansion (ITSA and VAT) together, set out in further detail.

      Policy objective

      MTD and its extension forms a crucial building block in the government’s 10-year strategy to make the tax system more resilient and effective, to boost business productivity, and support taxpayers. UK businesses and individuals are increasingly turning to digital tools and it is vital that the UK’s tax administration system keeps pace. MTD aims to help tackle the part of the tax gap caused by error and failure to take reasonable care, by removing opportunities to make certain types of mistakes in preparing and submitting tax returns. It does not change businesses’ tax liability or payment obligations, but reduces scope for error, and allows for better customer interaction and guidance through digital prompts and nudges. This in turn contributes to a reduction in the tax gap, supporting public services and levelling the playing field for businesses. The projected gains to the Exchequer resulting from MTD reflect the reduced scope for error. Businesses that move to real-time record keeping using accounting software may experience significant productivity benefits, as their software provides an up-to-date picture of their finances and may also provide additional functionality to integrate record keeping with other business processes. This can further reduce time spent on administration, allowing businesses to spend their time serving customers, innovating, growing and creating jobs. Businesses will therefore also save time through processes that help them get their taxes right first time and reduce the chances of time spent putting errors right at a later stage. Less time spent on tax administration has scope to cut stress and allow businesses to focus on their most pressing business priorities.

      Background to the measure

      Originally announced at Budget 2015, and following formal consultation in 2016, the first phase of MTD was implemented from April 2019. For VAT periods starting on or after 1 April 2019, VAT-registered businesses with a turnover above the VAT registration threshold have needed to keep their records digitally and provide their VAT return information to HMRC through MTD-compatible software. In July 2020, the government published ‘Building a trusted, modern tax administration system’, which set out a vision for the future of tax administration in the UK, designed to improve its resilience, effectiveness and support for taxpayers. A long-term strategy of focused, collaborative and transparent improvement of the tax administration system has the potential to yield huge benefits, both for individual taxpayers and businesses. It also contributes to the collective strength and resilience of the country as a whole. Extending MTD is a critical building block for this, with the expansion of mandatory MTD VAT from April 2022 and the introduction of mandatory MTD ITSA from April 2024, a year later than announced in July 2020.    
    • European Commission Calls for United Kingdom to Respect Obligations Arising from Protocol on Ireland/Northern Ireland

      Following a statement made by the United Kingdom (UK) Chief BREXIT negotiator, David Frost, who announced the extension of the post-BREXIT "grace period" with respect to customs declaration requirements applying to goods entering Northern Ireland for an indefinite period, the European Commission (EC) highlighted the importance of the EU-UK Withdrawal Agreement as an international agreement. According to the EC, "the Protocol on Ireland/Northern Ireland (the Protocol) is an integral part of the Withdrawal Agreement, as well as the agreed solution between the UK and the EU to the problems caused by BREXIT for the island of Ireland. Both sides are legally bound to fulfil their obligations under the Agreement."

      More specifically, the EC emphasized the fact that they will not agree with a renegotiation of the Protocol. Instead, the EC will continue working towards the achievement of stability, certainty and predictability, in order to protect the operation of the single market and to guarantee that businesses and citizens in Northern Ireland will reap the full benefits of the Protocol and, in particular, the access to the single market the Protocol provides.

      Finally, the EC stated that they are not moving to the next stage of the infringement procedure launched in March 2021 nor will they open any new infringement procedures for now.

      Note: Since 1 January 2021, the UK is a third country for customs duties and value added tax (VAT) purposes. However, the Protocol provides that the movement of goods between EU Member States and Northern Ireland will still qualify as intra-Community transactions. At the same time, the movement of goods between Northern Ireland and the rest of the UK will be considered as export and import transactions, requiring customs declaration formalities.

  • United States
    • United States – IRS Updates Countries on Tax Data Exchange List

      The IRS has provided (Rev. Proc. 2021-32) the list of countries to which the interest reporting requirement in reg. section 1.6049-4(b)(5) and 1.6049-8(a) applies. Also listed are countries with which Treasury and the IRS have determined that it is appropriate to have an automatic exchange relationship regarding the information collected under the regulation.


      This revenue procedure provides a list of the jurisdictions with which the United States has in effect a relevant information exchange agreement such that the reporting requirement of §§ 1.6049-4(b)(5) and 1.6049-8(a) of the Income Tax Regulations may apply with respect to certain deposit interest paid to residents of such jurisdictions. This revenue procedure also provides a list of the jurisdictions with which the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) have determined that it is appropriate to have an automatic exchange relationship with respect to the information collected under §§ 1.6049-4(b)(5) and 1.6049-8(a). These lists are updated and restated versions of those set forth in Rev. Proc. 2020-15, 2020-23 I.R.B. 905. Chile has been added in Section 3 of this revenue procedure to the list of jurisdictions with which the United States has in effect a relevant information exchange agreement. The Dominican Republic and Singapore have been added in Section 4 of this revenue procedure to the list of jurisdictions with which the Treasury Department and the IRS have determined that it is appropriate to have an automatic exchange relationship.


      Sections 1.6049-4(b)(5) and 1.6049-8(a), as revised by TD 9584, 2012-20 I.R.B. 900, require the reporting of certain deposit interest paid to nonresident alien individuals on or after January 1, 2013. Section 1.6049-4(b)(5) provides that in the case of interest aggregating $10 or more paid to a nonresident alien individual (as defined in section 7701(b)(1)(B)) that is reportable under § 1.6049-8(a), the payor is required to make an information return on Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, for the calendar year in which the interest is paid. Interest that is reportable under § 1.6049-8(a) is interest described in section 871(i)(2)(A) that relates to a deposit maintained at an office within the United States. The regulations also provide that such deposit interest is reportable only if paid to a resident of a jurisdiction that is identified as a jurisdiction with which the United States has in effect an income tax or other convention or bilateral agreement relating to the exchange of tax information within the meaning of section 6103(k)(4), under which the competent authority is the Secretary of the Treasury or the Secretary's delegate and the United States agrees to provide, as well as receive, information. Finally, the regulations provide that jurisdictions are so identified in an applicable revenue procedure (see § 601.601(d)(2)) as of December 31 before the calendar year in which the interest is paid. The preamble to the regulations (at 2012-20 I.R.B. 901-02) notes that the IRS will not exchange information with another jurisdiction, even if an information exchange agreement is in effect, if there are concerns about confidentiality, safeguarding of data exchanged, the use of the information, or other factors that would make the exchange of information inappropriate. Rev. Proc. 2012-24, 2012-20 I.R.B. 913, was published contemporaneously with the publication of TD 9584 to provide a list of those jurisdictions with which the United States has in effect an information exchange agreement, such that interest paid to residents of such jurisdictions must be reported by payors to the extent required under §§ 1.6049-4(b)(5) and 1.6049-8(a), and to provide a separate list identifying those jurisdictions with which the automatic exchange of the information collected under the regulations has been determined by the Treasury Department and the IRS to be appropriate. Before issuance of this Rev. Proc. 2021-32, the most current versions of those lists were set forth in Rev. Proc. 2020-15.


      The following are the jurisdictions with which the United States has in effect an income tax or other convention or bilateral agreement relating to the exchange of tax information within the meaning of section 6103(k)(4) pursuant to which the United States agrees to provide, as well as receive, information and under which the competent authority is the Secretary of the Treasury or the Secretary's delegate:
      Jurisdiction Rev. Proc. First Identifying Jurisdiction
      Antigua & Barbuda 2012-24
      Argentina 2018-36
      Aruba 2012-24
      Australia 2012-24
      Austria 2012-24
      Azerbaijan 2012-24
      Bangladesh 2012-24
      Barbados 2012-24
      Belgium 2012-24
      Bermuda 2012-24
      Brazil 2014-64
      British Virgin Islands 2012-24
      Bulgaria 2012-24
      Canada 2012-24
      Cayman Islands 2014-64
      Chile 2021-32
      China 2012-24
      Colombia 2014-64
      Costa Rica 2012-24
      Croatia 2014-64
      Curaçao 2014-64
      Cyprus 2012-24
      Czech Republic 2012-24
      Denmark 2012-24
      Dominica 2012-24
      Dominican Republic 2012-24
      Egypt 2012-24
      Estonia 2012-24
      Faroe Islands 2017-46
      Finland 2012-24
      France 2012-24
      Georgia 2019-23
      Germany 2012-24
      Gibraltar 2012-24
      Greece 2012-24
      Greenland 2017-46
      Grenada 2012-24
      Guernsey 2012-24
      Guyana 2012-24
      Honduras 2012-24
      Hong Kong 2014-64
      Hungary 2012-24
      Iceland 2012-24
      India 2012-24
      Indonesia 2012-24
      Ireland 2012-24
      Isle of Man 2012-24
      Israel 2012-24
      Italy 2012-24
      Jamaica 2012-24
      Japan 2012-24
      Jersey 2012-24
      Kazakhstan 2012-24
      Korea, Republic of 2012-24
      Latvia 2012-24
      Liechtenstein 2012-24
      Lithuania 2012-24
      Luxembourg 2012-24
      Malta 2012-24
      Marshall Islands 2012-24
      Mauritius 2014-64
      Mexico 2012-64
      Moldova 2018-36
      Monaco 2012-24
      Morocco 2012-24
      Netherlands 2012-24
      Netherlands special municipalities: Bonaire, Sint Eustatius, and Saba 2012-24
      New Zealand 2012-24
      Norway 2012-24
      Pakistan 2012-24
      Panama 2012-24
      Peru 2012-24
      Philippines 2012-24
      Poland 2012-24
      Portugal 2012-24
      Romania 2012-24
      Russian Federation 2012-24
      Saint Lucia 2016-56
      Singapore 2020-15
      Sint Maarten 2014-64
      Slovak Republic 2012-24
      Slovenia 2012-24
      South Africa 2012-24
      Spain 2012-24
      Sri Lanka 2012-24
      Sweden 2012-24
      Switzerland 2012-24
      Thailand 2012-24
      Trinidad and Tobago 2012-24
      Tunisia 2012-24
      Turkey 2012-24
      Ukraine 2012-24
      United Kingdom 2012-24
      Venezuela 2012-24


      The following list identifies the jurisdictions with which the automatic exchange of the information collected under §§ 1.6049-4(b)(5) and 1.6049-8 has been determined by the Treasury Department and the IRS to be appropriate:
      Jurisdiction Rev. Proc. First Memorializing Determination on Automatic Exchange with Jurisdiction
      Australia 2014-64
      Azerbaijan 2016-18
      Belgium 2017-31
      Brazil 2015-50
      Canada 2012-24
      Colombia 2017-31
      Croatia 2017-46
      Curaçao 2019-23
      Cyprus 2019-23
      Czech Republic 2015-50
      Denmark 2014-64
      Dominican Republic 2021-32
      Estonia 2015-50
      Finland 2014-64
      France 2014-64
      Germany 2014-64
      Gibraltar 2015-50
      Greece 2018-36
      Guernsey 2014-64
      Hungary 2015-50
      Iceland 2015-50
      India 2015-50
      Ireland 2014-64
      Isle of Man 2014-64
      Israel 2016-56
      Italy 2014-64
      Jamaica 2016-18
      Jersey 2014-64
      Korea, Republic of 2016-56
      Latvia 2015-50
      Liechtenstein 2015-50
      Lithuania 2015-50
      Luxembourg 2015-50
      Malta 2014-64
      Mauritius 2014-64
      Mexico 2014-64
      Netherlands 2014-64
      New Zealand 2015-50
      Norway 2014-64
      Panama 2017-46
      Poland 2015-50
      Portugal 2017-31
      Saint Lucia 2016-56
      Singapore 2021-32
      Slovak Republic 2016-18
      Slovenia 2015-50
      South Africa 2015-50
      Spain 2014-64
      Sweden 2015-50
      United Kingdom 2014-64
      Rev. Proc. 2020-15 is superseded.


      For purposes of the reporting requirement of § 1.6049-4(b)(5), the list of jurisdictions in Section 3 of this revenue procedure is effective: (i) with respect to Chile, for interest paid on or after January 1, 2022; and (ii) with respect to each other listed jurisdiction, for interest paid on or after January 1 of the calendar year following the issuance of the revenue procedure (as cited in Section 3) first identifying the jurisdiction as having in effect an agreement with the United States as described in § 1.6049-8(a). The list of jurisdictions in Section 4 of this revenue procedure is effective from the date of issuance of this revenue procedure with respect to information reported to the IRS pursuant to §§ 1.6049-4(b)(5) and 1.6049-8(a) for any tax year for which the jurisdiction was included in the list in Section 3. The revenue procedure citations in the Section 4 list are included for historical reference.
    • Has US Government Had Change of Heart on Cryptocurrencies?

      The US government may no longer treat cryptocurrency as property in certain situations. What one thought was a well-established principle is not so sacrosanct. The US Internal Revenue Service (IRS) has previously issued announcements stating quite clearly that cryptocurrencies are property. This treatment was based on IRS Notice 2014-21 and Revenue Ruling 2019-24. These announcements were quite clear that cryptocurrencies are deemed property and not foreign currency. For example, under IRS Notice 2014-21, using a questions-and-answers format, the IRS stated the following:
      1. How is virtual currency treated for federal tax purposes?
      2. For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.
      3. Is virtual currency treated as currency for purposes of determining whether a transaction results in foreign currency gain or loss under US federal tax laws?
      4. No. Under currently applicable law, virtual currency is not treated as currency that could generate foreign currency gain or loss for US federal tax purposes.
      Fast forward to 27 August 2021, the Department of Justice (DOJ) filed a formal answer to a complaint from taxpayers in the US District Court for the Middle District of Tennessee, Nashville Division (Joshua Jarrett; Jessica Jarrett v. United States of America, Case No. 3:21-cv-00419). In their complaint, the Jarretts are seeking a tax refund on their digital tokens they generated. The surprise took place when the DOJ, in responding to the Jarretts' complaint, argued that the United States does not agree that virtual currency in all instances is deemed property for the purpose of US federal tax law. The tax implications would be significant as property is generally treated with capital treatment under section 1221 of the US Internal Revenue Code (IRC) and foreign currencies, ordinary treatment under IRC section 988. As the case heads towards litigation, more details on the DOJ's position will be delineated.
    • Why the United States Needs a 21% Minimum Tax on Corporate Foreign Earnings

      The President’s Made in America Tax Plan provides a framework to raise revenues in order to rebuild our infrastructure and to make critical investments in education, research, and clean energy, all of which help the United States remain the best place in the world to do business. The plan would not just generate funding to pay for a sustained increase in investments, but it would do so in a way that makes good policy sense. Importantly, it would fix a broken international tax system that rewards corporations for offshoring jobs and shifting profits overseas.

      Under current law, U.S. multinational corporations face only a 10.5% minimum tax on their foreign earnings, half the rate that they pay on their domestic earnings, incentivizing them to operate and shift profits abroad. That rate is also far less than small businesses pay on Main Street - which earn all of their profits at home - or the tax rates faced by workers - who bear an increasing share of the tax burden as the corporate burden dwindles.

      The Made in America Tax Plan would increase the minimum tax on corporate foreign earnings to 21%, reducing a corporation’s incentives to shift profits and jobs abroad. This policy would bring fairness to the working and middle classes not only through the programs it funds but by creating a more level playing field so that jobs and investment can flourish in the United States. Under current law, companies have large tax incentives to put activities and earnings offshore; a strong minimum tax can reduce that tax distortion, favoring activity and earnings at home.

      Corporations have defended a lower rate on foreign income by arguing that their foreign competitors often pay 0% on their foreign earnings; in other words, they argue that U.S. corporations should pay less than American working people in the name of “competitiveness.” Regardless of what the U.S. corporate rate has been in recent decades, whether 35 percent (pre-2017) or 21 percent since then, U.S. corporations have been the most profitable in the world, advantaged by a large market, strong institutions, and a well-educated work force. Future investments in climate change mitigation, education, infrastructure, and research and development - funded by these tax changes – will maintain that standing and will only make the competitive position of U.S. corporations stronger.

      Further, in a generational achievement, 134 countries, representing more than 90% of the world’s GDP, have agreed to rewrite the international tax rules to impose a global minimum tax on corporate foreign earnings, thereby ending the race to the bottom that has starved nations of revenues. In the realm of tax competition, no country wins and working and middle class people around the world lose.

      Global Decline in Corporate Tax Rates

      Importantly, the global minimum tax will function as a floor, not a ceiling, and will therefore allow nations to calibrate the precise rate to their specific country’s needs. The United States must and can act boldly here, leading the way with a 21% minimum tax on the foreign earnings of U.S. corporations. With a global minimum tax now on the horizon, U.S. corporations will be more competitive than they ever were before, as foreign corporations will face minimum tax rates almost worldwide. Importantly, the agreement includes enforcement provisions that encourage countries to join by imposing unfavorable tax treatment on companies based in recalcitrant countries. And with the establishment of a level playing field, the global minimum tax deal creates reliable revenues going forward, benefitting generations to come.

      Current Global and U.S. Minimum Rates on Corporate Foreign Earnings

      As Congress begins to finalize its legislation, Secretary Yellen has urged its Members to remember the historic opportunity that we have to end the race to the bottom. We can have a tax code that both works for the middle class and furthers the competitiveness of U.S.-based multinationals. Embracing a strong minimum tax at 21 percent is in the national interest and will also further our international efforts toward reducing the pressures of tax competition.

      Source: US Department of the Treasury

    • IRS Issues Fact Sheet on E-Signatures

      The US Internal Revenue Service (IRS) has issued a Fact Sheet (FS-2021-12) with an overview about using electronic or digital signatures on certain IRS forms. The Fact Sheet was last reviewed or updated on 1 September 2021.

      An electronic signature is a way to get approval on electronic documents. The IRS will accept a wide range of electronic signature methods, including:

      • a typed name typed on a signature block;
      • scanned or digitized image of a handwritten signature that is attached to an electronic record;
      • a handwritten signature input onto an electronic signature pad;
      • a handwritten signature, mark or command input on a display screen with a stylus device; and
      • a signature created by a third-party software.

      The IRS does not specify what technology a taxpayer must use to capture an electronic signature. The IRS will accept images of signatures (scanned or photographed) including common file types such as tiff, jpg, jpeg, pdf, Microsoft Office suite or Zip.

      The IRS allows taxpayers and their representatives to use electronic signatures on certain paper forms, which they cannot file using IRS e-file. The Fact Sheet includes a list of those forms. The forms are available on the IRS's webpage under the heading of "Forms, Instructions & Publications."

      The Fact Sheet notes that the IRS is balancing the electronic signature option with critical security and protection needed against identity theft and fraud.