Kowloon East overtakes Wanchai/Causeway Bay as city’s second largest office market
Kowloon East overtakes Wanchai/Causeway Bay as city’s second largest office market
November 28, 2016
The Goldin Financial Global Center considered fundamentally.
Kowloon East has surpassed Wanchai/Causeway Bay to become the city’s second biggest office advertise base on floor space.
As reported by a statement from JLL, this depends on its Hong Kong Property Market Monitor. The jump up the rankings took after the finishing of Goldin Financial Global Center in Kowloon Bay, which included an additional 602,400 sq ft and reinforced aggregate Grade A office stock in Kowloon East to 15.4 million sq ft, trailing only Central.
The awareness of pre-responsibilities at the building added to net take-up of around 68,000 sq ft in the general market. Even with the new supply, the opening rate in Kowloon East expanded to 10.7%, the biggest among the greater part of the city’s key office submarkets.
In Central, a few entire floor rent expiries along with relatively slow demand and tight opening kept net take-up under 10,000 sq ft for the third sequential month. Renting activity was mostly reinforced by expansion and updating prerequisites from PRC organizations. A large part of this demand is caught in pre-renting transactions of not yet accessible space.
Here’s additional from JLL:
However, drove by development and repressed demand in the top-end of the market, Central rentals kept on ascending to achieve HKD110.4 per sq ft, yet at a slower pace, up 0.6% m-o-m. In Wanchai/Causeway Bay, constricting opening rates saw rentals progress by 0.9% m-o-m, their most grounded increment in a month this year.
Alex Barnes, Head of Hong Kong Markets at JLL, said: “With its huge office floors and low leases, Kowloon East will keep on attracting organizations from Hong Kong Island. The capacity for Kowloon East to form into a front office area for the finance division is challenging because of divided possession, lack of office clustering and comfort.”
Denis Ma, Head of Research at JLL, said: “With vacancy rates in Kowloon East now at their biggest amount in 5 years, and set to move higher over the coming 12-months, the capacity for landowners outside of Central to drive rents higher will turn out to be progressively restricted. Combined with the still rising rental environment in Central, we anticipate that more inhabitants will consider decentralization over the coming 12-months.”
As the end of the financial year looms, critical thoughts in regard of yearly audit should be made by multinational entities (MNEs) working in China. On June 29, 2016, China’s State Administration of Taxation (SAT) issued a notice with respect to reporting of related party transactions and organization of transfer pricing documentation (SAT open notice  No. 42), thus referred to as ‘Notice 42’, which was reviewed in our past article. It redesigns and gives new transfer pricing necessities and special tax revisions earlier provided in Guo Shui Fa  No. 114 and Guo Shui Fa  No.2, sections of which have been substituted or void. Remarkably, it details on yearly reporting forms for related party transactions (RPT frames), which this article investigates top to bottom.
The new law specifies that a report of annual related party business transactions should be submitted to tax authorities alongside annual enterprise income tax returns by both resident and non-resident enterprises that have built up businesses or buildings in China. In the report, the quantity of related part filing forms has been bigger from nine to 22, including information disclosure of the Country-by-Country (CBC) Report. The new law shows that the documenting report is required to contain the accompanying:
- Complete details of the reporting business, including details in regards to fundamental company details, core departments, number of employees, senior administration, and shareholders, and so on.
- Definite data of both sides’ financial asset transaction, equity investments, and cost sharing agreements.
- Details of the overseas related party, including registered business address, actual operation address, business scope, applicable tax rate, and any relevant income tax incentives.
- Current financial condition of the reporting business, including inbound and outbound related and non-related party transactions.
- Sectioned financial reports in view of the individual substance’s money related report alongside the solidified budgetary report.
Furthermore, the CBC Report form should be documented as per the information disclosure requirement stipulated by Action 13 of the OECD’s Base Erosion and Profit Shifting (BEPS) Project. CBC Reports are required for the following taxpayers, and must be submitted in both English and Chinese for either:
- Resident taxpaying ultimate shareholding business of the group with union income for the past bookkeeping year surpassing RMB 5.5 billion.
On the other hand
- • Enterprises which have been assigned as the reporting party of the CBC Report. This condition is same with Action 13 of OECD BEPS Actions.
Meaning of related party transactions
The new law also explains what is viewed as a related party transaction, laying down a clear outline as follows:
- Transfer of usage rights or ownership of tangible assets, the latter of which includes commodities, products, buildings, vehicles, machinery, and equipment, and so on.
- Transfer of financial assets, which comprise of assets getting from accounts receivable, other receivable, equity investments, debt investments, and derivative financial instruments, and so on.
- Transfer of use rights or ownership of intangible assets, which compose of patents, non-patented technologies, commercial secrets, trademarks, brands, client lists, sales channels, franchise rights, government licensing, copyright, and other such items.
- Financial (fund) intermediation. Such funds incorporate different long-term and short-term borrowed funds (including enterprise group capital pools), guarantee fees, different types of accrued interest advances and deferred payables and receivables and so forth.
- Service transactions, which include those for market surveys, marketing planning, agencies, design, consultancy, administration, technical services, contract R&D, repair and maintenance, legal services, financial management, audit, recruitment, training, centralized procurement, etc.
Analysis and risk management
The rise of filling forms fairly expands dangers for multinational enterprises. The segmented financial report will give a contrast of the benefit between related parties and non-related parties, and a considerable difference between the two will trigger the attention of tax authorities, in this way establishing an expansion of taxpayers’ risk. Thus, for businesses who have not beforehand segmented financial reports previously, it is fitting to construct this financial year’s on 2015 financial data and then revise it if there is an obvious difference between profits and sales.
Moreover, compliance burden for taxpayers will be increased by the fixed requirement for information disclosure of overseas related parties, and as some businesses keep up different related party relationships, one approach to stay up to date with the increased burden is to guarantee important data is gathered in both an exact and opportune form.
The related party transaction form will get to be distinctly instrumental components for tax authorities to choose examination targets through the method for big data analytical systems, which have been applied by the SAT in all cases of tax authorities. This highlights the general significance of maintaining consistence, and applying successful administration of related party transactions.
China’s adherence to the OECD’s tax principles as the BEPS venture is an indication that the nation is making efforts, alongside other part nations, to minimize tax avoidance committed by MNEs by further representing their conduct and operation. New policy notifying related party transaction reporting ultimately aids to guarantee that profit allocation is in line with profit creation, and is an indication that China’s tax authorities will focus on more successive and stringent activity to guarantee a uniform and effective transfer pricing administration. Hence, businesses must know about the dangers and implications the new regulation brings, particularly in its requirement for an increased volume of documenting reports, and should adjust administration frameworks and also make additionally move to be completely consistent so as to avoid from acquiring punishments from tax authorities.
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