On 31 March of 2009, China Securities Regulatory Commission issued the Administrative Measures for Initial Public Offerings and Listing on the Second Board (hereafter referred to as “Measures” for short). The Measures was formulated on the 1 May of 2009. The Measures explicitly stipulates that enterprises listing on the Second Board are mostly the independent innovation enterprises and other growth venture companies. High-tech enterprises become the main subjects to list on the Second Board in the future. Such enterprises as those engaging in new energy, new materials, biological medicine, electronic information, environment protection and energy saving, modern service and innovation of technical business model will greet historical development opportunities.

Tips for Tax Risks:
Enterprises wishing to list on the Second Board are always small and being the period of venture and development. There are relatively more problems such as delaying tax, two sets of accounts, reimbursement by use of informal voucher, fake invoices, illegal deduction of input tax amount of value added tax. Besides, their tax administration level is relatively low and tax risks are high. Having higher tax risks is the main factor to induce enterprises into tax administrative punishment and economic losses which hinders the process of listing on the Second Board. Such as how to avoid tax risks, how to achieve tax preference policies and how to promote enterprises to list on the Second Board by means of tax planning etc., are all problems the management personnel of enterprises must face with.

Scope of service:
Hwuason team has an accurate grasp on tax policies of high-tech occupation and supply tax planning and consulting for enterprises planning to list on the Second Board. During the process of listing on the Second Board, Hwuason can offer you such services as:

• Tax health examination before listing;

Auditing tax declaration and payment conditions;
Investigating back tax conditions;
Auditing legality of tax preference;
Assisting the surveyed party to make tax make-up plan;
Examining tax adjustment reports of tax authorities;
Auditing related information like vouchers, accounts and transaction contacts and pointing out the main tax risks;
Other tax problems that may influence surveyed enterprises’ listing

• Determination of high and new tech enterprises;
• Determination of advanced technology service enterprises;
• Determination of anime enterprises;
• Determination of software enterprises and software products;
• Additional calculation and deduction of research and development expenses;
• Deduction and exemption for business tax of “four technical income”;
• Deduction and exemption for enterprise income tax of technology transfer income;
• Tax planning for M& A and restructuring;
• Other tax services.