I recently spent a week in New Delhi and Mumbai, speaking at tax conferences about U.S., Chinese, and Indian tax matters. Now I am back in Hong Kong, where at the Shatin Race Track, the first race is over and not one of the four horses I bet on in a quinella were in the money. I certainly hope that my tax choices are better than my ability to bet on the ponies. I won in races 5-9, but as usual came away with a lighter wallet. I love the ponies, though, and the racing form is the only chance I get to study numbers that have nothing to do with taxes.

They say that there is no such thing as a sure bet — all those inside tips are worthless. But there is a sure bet in India. The India-Switzerland income tax treaty has taken effect, and it is guaranteed that any shady Indian money in Switzerland before the effective date of  the treaty has either been transferred to Singapore or been reduced to avoid any ‘‘black money’’ connota- tions. With all the fuss about money being hidden overseas by wealthy Indians, Finance Minister Pranab Mukherjee is limited

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Oh, it sounded so good when we, the voters, were given the choice of limiting how much tax we’d pay, tied in to the date we purchased property, locking ourselves into a valuation based on purchase date even though inflation would raise property fair market value and hence assessed tax and tax collections from all those new buyers. Those of us who purchased homes and intended to live in them forever loved it. Let those who were frequent movers suffer the consequences. Some of us were locked into a tax that seemingly got lower as the years went by. Of course, this is a prime contributor to why California counties now can’t raise sufficient revenues.In Hong Kong and China, where housing is a commodity that is traded as the day trader deals with the rapid ups and downs of stocks on the market, tax authorities would not have those problems. Property taxation is, as I have previously written, in its infancy in China. It is a tax that must develop as municipalities are rapidly running out of long-term land leases they can sell. It is easy to raise revenue when you’ve got excess land for sale. It becomes a nightmare when your city runs out of land, curtailing that

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I began playing politics in California in 1960 when I got involved in the movement to draft Adlai Stevenson as the 1960 Democratic Party presidential nominee. I have continued having political interests, albeit on a more international basis, after moving to the other side of the Pacific in 1990. I thrived on information gathered during visits to Washington, Sacramento, or Los Angeles in the past. Now I’m close to the source of political policy in Beijing and Guangzhou, and in Bangkok, Singapore, and Delhi as well, cities where there is tremendous power being wielded by brokers who do not want to be represented in the press. I respect their wishes, but it is hard to believe that I’ve been here long enough to witness these individuals rise to positions of power.

These movers and shakers are concerned about inflation — scared out of their minds is more like it. They want to curb speculation, but they worry about how to do it. On August 17 the central government in Beijing announced policy directives, effective immediately, requiring provincial governments to report progress in curbing rising home prices. Taxing short-term sales has a lot to do with cooling off the

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PART I.

YOU WILL NEED A SECOND PASSPORT!

Generally, I don’t follow the politics of the day.  Many lawyers’ mantra is “let’s just work with the laws we are given...”  I find this hard to understand.  At law school, I worked as a legal  assistant  for the Office of Chief Counsel International at L'Enfant Plaza in Washington, D.C.  We had interactions daily with Congresspeople and Senators as they tried to understand legislative bills.  We also tried to understand, subsequently, the intent of the Senate and Congress in passing the legislation.  Now, the legislative bodies and the Executive Branch are passing bills like never before!  Just a few years ago, I would get a monthly publication, compliments of the U.S. Treasury, detailing the changes in the tax law.  This was usually less than 25 pages and easy to read over a weekend with strong coffee. Now, I get daily updates on the legislative changes; averaging 3 plus a day!!!  I find my weekends filled with trying

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I learned how Chinese power politics based on financial clout work in 1999, when I served as chair for the American Chamber of Commerce-South China. As AmCham chair, I gave face time to Chinese high-level provincial leaders who reciprocated with the necessary guanxi to get me the same rights and privileges as the Big Four accounting firms in the P.R.C. - without the costs they paid to obtain their licenses. I maintained that accounting practice for a decade, until I retired from active accountancy. Of course, the coming of Sarbanes-Oxley had a lot to do with it: That legislation took all the fun out of being an accountant!

I was invited to attend a meeting as an initial board delegate to the business plan/proposal that eventually became the Binhai New Economic Development Zone, emanating from Tianjin. Based on what I saw and heard, I determined the plan was developed in Guangzhou but under provincial direction. As far as I can conclude, this was the business model that was taken over by the central government. The central government owed the financial developers from Guangdong big-time, and Guangdong had the clout to see that it got the proper compensation. They got

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Where is the black money hidden? India is hellbent on finding it, only the math does not add up.

On June 18, in a speech made in Hyderabad, Finance Secretary Sunil Mitra said India has to renegotiate and modify 87 double taxation avoidance agreements (DTAAs). ‘‘From 2010 and 2011, we have identified 65 of our double taxation avoidance agreements that need to be amended so that we have freer access to information. Twenty-two we have identified with whom we need to do tax information exchange. . . . So 87 agreements we need to either renegotiate or we need to do afresh,’’ Mitra said, according to the June 19 edition of dailyindia.com.

Mitra also said India has DTAAs with 79 countries. Thus, it would appear that brand-new treaties are going to be needed with eight other countries. Who are those countries? It just might behoove some Indian nationals to move funds to one of the eight countries where new treaties will be negotiated because it is going to take three to eight years to enact a treaty. Ex post facto laws will likely apply so that information about money matters before the date of the treaty will not

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HERE it is, we're already well into September, and with my workload substantially reduced, now that "tax season" is over, I've got both the time and research material to work on tax articles but do so with reluctance because my iPad is only single tasking. This would not be a problem if I did not do my daily writing on the iPad.

 I also watch baseball on my iPad. The feed for Major League Baseball is far superior on my iPad than my office computer. I want to watch a baseball game simultaneously with writing. In a "perfect world", a world without internet interruptions, that would be 'standard'. Alas, it simply can't be done in China.

I can assure you that with a good, clear broadband transmission, watching the baseball game will be my task (and getting back to writing this essay, later) - such are the simple realities of my tax life.

So Just what are the Chinese doing, tax wise, that you should be aware of

Well, my friends, in order to find out, you're going to have to first read through the following US tax section.

More U.S. from me? Why not?

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Just a few more days in Hong Kong and then back to Guangzhou. This is my 21st year of commuting between those two home bases. The two-hour trip between the cities is an enjoyable way to re-acclimate myself to each one’s different pace, environment, and culture.

The trip, by train, is a visit through what used to be China’s cheap manufacturing export district to the West. It’s not anymore. Over the past half-decade, export manufacture has declined. Now Guangzhou has far more days of clear, blue skies than I’d thought possible. Wouldn’t it be nice if we could keep the blue skies while benefiting the economy?

Guangdong Vice-Governor Zhao Yufang recently visited Hong Kong with a large provincial delegation,
offering incentives for investment.

Less than five years ago, there were 60,000 Hong Kong-owned factories in the Pearl River Delta, employing 10 million migrant laborers. The factories were smokestack-topped, high-pollution, cheap-labor sweatshops. They manufactured for the big discount chains.

Times have changed. There are currently 35,000 Hong Kong-owned factories with far fewer employees, albeit they are earning higher wages. Guangdong wants to change — but it will allow some of the high pollution plants to remain, if

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