Summary
- Capital reductions can be categorized in various ways, and tax implications and accounting treatments vary accordingly and should be carefully considered
- Formal Capital Reductions do not lead to a
Tax Treatment of Capital Reductions: Part I Formal Capital Reductions
The amended PRC Company Law will have many, far-reaching effects, including motivating companies to reduce their registered capital in order to optimize capital utilization. Daisy Duan, Yingjie Yang and Cuishi Li of King & Wood Mallesons introduce the motivations and tax implications associated with one possible route: formal capital reductions
By
Susan Mok