The IRS Deductions Blog

Archive for May, 2009

Free and Open Economy

In the 2009 Index of Economic Freedom, Hong Kong has once again been placed first, the fifteenth consecutive year it has held this position. The index is an annual survey conducted by The Heritage Foundation and The Wall Street Journal that compares 183 countries in relation to 10 ‘freedom’ variables including business freedom, investment freedom, property rights, freedom from corruption and more. Economic freedom is still largely regarded as an important key to growth and prosperity. As free trade is the life-blood of Hong Kong, Hong Kong embraces globalisation of trade and services. There are no barriers to trade – such as tariffs and quotas – being put in place, and there is no foreign exchange controls or restrictions on both inward and outward investments. Additionally, the Hong Kong Government also does not place any nationality restrictions on corporate or sectoral ownership. This makes company formation in Hong Kong an attractive and relatively fuss-free option.

It has been proven that investing in Hong Kong is a very attractive and popular proposition for investors. According to the latest World Investment Report released by the United Nations Conference on Trade and Development (UNCTAD) in 2008, Hong Kong was the world’s seventh and Asia’s second largest Foreign Direct Investment (FDI) recipient, attracting US$54.4 billion worth of inward investment in 2007. Taking into consideration the small size of Hong Kong, it comes as no surprise that it was also ranked first globally in the report’s Inward FDI Performance Index – which measures the amount of FDI relative to the size of the economy.

Gateway to Mainland China

Situated at the mouth of the Pearl River Delta (PRD), Hong Kong is strategically located for trade with Mainland China. China’s rapid economic development of increasingly competitive industries has created more opportunities for even greater economic expansion. With the Closer Economic Partnership Arrangement (CEPA) that took effect in 2004, Hong Kong can now benefit from additional and exclusive Mainland market access. Company incorporation in Hong Kong would mean that the vast market of Mainland China is readily accessible.

Mainland China is now Hong Kong’s largest trading partner and they are both key to one another’s economic success. Hong Kong is the largest source of overseas direct investment in Mainland China. Mainland China’s direct investment in Hong Kong is also a very significant – accounting for 40.7% of the total stock of inward direct investment in 2007. This shows that there is great interdependence between Hong Kong and Mainland China’s economies, and that by incorporating a company in Hong Kong, it serves as a great springboard for expansion into Mainland China.

Low Taxes

At 16.5%, Hong Kong’s corporate tax rate is among the lowest in the world. Hong Kong adopts a territorial basis principle of taxation, where only profits which have been sourced in Hong Kong are taxable.

The effective tax rate is even lower after taking into consideration tax exemptions and deductions such as Industrial Buildings Allowances on Industrial Buildings and Structure, Commercial Buildings Allowances on Commercial Buildings and Structures, Plant and Machinery Allowances, approved Donations and other allowable Deductible Expenses in accordance to Hong Kong’s Inland Revenue Ordinance.

In addition, there is no capital gains tax in Hong Kong and no withholding tax on dividends and interest or collection of social security benefits. There is no Value-Added Tax (VAT) in Hong Kong. The limited tax base, coupled with very low tax rates, makes Hong Kong’s tax incidence one of the lowest, if not the lowest, among developed economies, and therefore, Hong Kong company formation makes for a very tax efficient business entity.

A Hong Kong company is also not perceived to be an offshore company in an international tax haven because Hong Kong is a reputable, regulated international trading jurisdiction. Annual audited financial statements must be submitted to the Hong Kong Inland Revenue Department. Also, Hong Kong company incorporation requires the appointment of a Hong Kong-resident company secretary.

In conclusion, with proper planning, company formation in Hong Kong serves as a highly effective and efficient tool for investors and entrepreneurs alike. With its free and open economy, low taxes, and strategic position as a gateway to Mainland China, Hong Kong is abundant with vast opportunities for investment and growth.

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MBO Partners Launches Program to Help Animation Studios and Freelance VFX Artists and Animators

A new innovative service from MBO Partners relieves the tax and business pain experienced by animation studios and freelance artists trying to work together. To celebrate the debut, MBO Partners is offering $100 signing bonuses to freelance animators and VFX / motion graphics artists who join or refer their colleagues before January 31, 2010.

Finding More Tax Deductions for Small Business Owners in 2009, 2010

Calculating your own BMI may well seem like some sort of arcane procedure that you really don’t have the time or the intellect for. Think again! It’s not complicated and it’s not something that can only be worked out properly by a doctor. And it’s a useful guide to your health and weight and can help you get rid of excessive flab, such as love handles,belly fat and unwanted man breasts.

You may have seen and used automatic BMI calculators online which asks you to put in your weight and height before telling you ‘Your BMI is …’ along with a scale of numbers so you can evaluate whether you’re dangerously obese, underweight, have a few pounds to lose or don’t have to worry for the moment. How the calculator online works this out is actually pretty simple if you know what the underlying formula is.

But first, what do the letters ‘BMI’ stand for, and what does BMI actually mean?

BMI stands for ‘Body Mass Index’. It’s a way of looking at your weight in proportion to your height. A heavy person who is very tall may be quite slim although they weigh a lot of pounds. Someone much shorter who weighs the same will be fatter. The BMI number represents the ratio of your height to your weight. The way it is calculated is simply by dividing your weight by your height. Then, by comparing the single number that is the result, you can see on the standard BMI scale whether you are underweight, overweight or normal for your height.

It’s not a perfect system because it doesn’t measure the proportion of fat to lean muscle in your body. So very muscular people such as athletes or body-builders may come out with a ‘high’ BMI (indicating they’re overweight) when actually they’re in stellar shape. (Muscle is denser than fat so it can throw out the calculations.) There are also a very few ‘thin fat people’ who do not appear overweight but have such a sedentary lifestyle that their fat-muscle ratio is too high in fat. They will appear normal or slightly overweight on a BMI scale when in fact they may face health risks from having too much fat in their body. For such a person it’s a good idea to get onto a healthier diet as soon as possible, perhaps including health supplements to help boost muscle and lose fat — such as chromium with B-complex, acai berry or green tea — and choose some fun exercise regimes which can be taken gradually up to a high effort level — for example, kettlebell routines or gym circuits.

To find out your own BMI, simply take your weight in kilograms and divide it by your height in meters, squared. For example, say you are 160cm tall. 1.6mX1.6m gives 2.56 (that’s the height squared in meters). And say you weigh 60kg. Divide 60 by 2.56 and you get 23.44. That is your Body Mass Index — the index, or guide, to your body’s mass, or basically how much weight you have for your height!

If you work out your BMI and it totals 18.5 or less, you are underweight. If it falls in the range from 18.5 to 24.9 (like the number we just calculated as an example) then you are a normal weight for your height. If your BMI is more than 25 but less than or equal to 29.9 then you are overweight for your height. A BMI of more than 30 is classed as obese and there are health risks attached.

Although BMI calculators don’t give very subtle results, knowing your BMI does give you a numerical handle on what your body’s proportions are like compared with the healthy norm. So now you can calculate your own BMI and if it comes out a bit higher than you’d like, you can set yourself a new BMI goal to work towards.

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Franchise Tax Board: Last Minute Tips for California Taxpayers

SACRAMENTO, Calif.—-With the April 15 tax deadline only days away, the Franchise Tax Board reminds taxpayers that electronic filing is the fast, secure way to file and receive a refund quickly.

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Curtain calls

Erika Torri, Joan & Irwin Jacobs executive director, Athenaeum Music & Arts Library Compiled By Linda McIntosh Contributor Concerts. Theatrical performances. Art exhibits. The local arts scene is poised to offer many uplifting inspirational moments this year. We talked with the directors of nine area institutions and gave them center stage to share their plans. Athenaeum Music & Arts Library …

Kudos to San Diego Junior Theatre from Christian Hoff

New Year is the time for all of us to forget past grudges and start afresh. It is the time to take resolutions that we will not repeat past mistakes. It is the time to realize the true worth of our loved ones. And eventually, it is the time to feel and celebrate the presence of the people who love, care and live for us. That’s the reason we call it-a NEW YEAR! Like every year, New Year 2010 celebration will be a major celebration worldwide. New year 2010 will signify new hope, new aspirations and new beginning and in the middle of that eagerness and hope we would love to go through the New Year calendar 2010.

The things we first search in a new year calendar are usually common to everyone. Most of us would first check out the days of birth dates, anniversaries or special days of ourselves and loved ones as well. The second most important to look through the Calendar 2010 is the days on which holidays fall and when we can opt for a long weekend to plan something exciting maybe a short vacation with families and friends. A calendar is encapsulated with days, weeks and months of a year organized in a systematic pattern to enable one to keep a track of the occasions and events.2010 calendar has mentioned all the holidays and occasions that you could celebrate with your friends, family and special people in your life. Upcoming year 2010 will start from Friday. The start of new year 2010 will fall on Friday and end on Friday too. This New Year day is celebrated as a holiday in several countries across the world. The 2010 calendar is available in several formats; online, printable, table calendar and also the ones that you could hang on the wall.

Gone are the days when people used to buy calendars from the market and struggle within the pages of that calendar to get the dates they are searching for. Now various sites online displays array of distinct and fabulous looking online calendars. You just need to surf the net and flip through the pages to select an online calendar of your choice. Using Free 2010 online calendars, you will be able to mark and highlight important dates and schedule your daily or weekly or monthly routines as well and make notes of appointments and checkups, meetings with doctors, school counselors and so on. You can also place your 2010 online Calendar on desktop or even get it printed to placed on your notice board may be at our work desk or at home in the form of printable calendar.
Various sites have posted 2010 calendar online. One can easily download the calendar or take its print for further reference as printable calendar.

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10 ways Uncle Sam helps you save money

Saving for the future is important. Luckily, we all have a rich Uncle Sam to turn to.

Items on Amazon Right Now for Tax Payments Deductible:

The pigskin piggy bank that keeps on giving

Football’s money-making impact fuels all aspects of life on campus, even the educational ones.

OCEAN’S 7- OWE ME SEX