When he recalls walking down the handicapped aisle, though, bypassing hundreds of passengers, he refers to it as “the walk of shame.”īoth examples are typical illustrations of preferential treatments that backfire and trigger feelings of guilt and embarrassment. His wife was thrilled by this special treatment. A store employee offered him a note to hand to the airport security personnel, which allowed him and his wife to proceed through the handicapped aisle and skip a 90-minute wait in line. On another occasion, one of the authors bought an expensive piece of luggage in an airport store just before entering a long security queue in which hundreds of passengers were waiting. The author was so embarrassed that she swore never to go to that restaurant again her friend, instead, was delighted. The benefits were so great that the two became the center of attention (and envy) of the entire restaurant. Because the restaurant owner personally knew one of them, the staff went to great lengths to please them: they were seated at a central table, received exquisite attention and lavish service, and were offered special dishes that were not on the menu. One of the authors went to a fancy restaurant with a friend to celebrate a special event. Finally, by tying consumer preferences to two readily available variables (age and gender), this article concludes with a set of practical guidelines for the companies that hope to align their DPT strategy with customer profiles. Through two studies, the article shows that distinction seekers prefer visible rewards that impose on other customers, but negotiators prefer unjustified, non-surprising privileges. This article then introduces customer heterogeneity in the form of two individual traits that moderate DPT evaluations. To help companies align their DPT with their customers' preferences, this article identifies four dimensions along which consumers positively or negatively evaluate DPT: justification, imposition, visibility, and surprise. This research argues that the reality is more complicated: the same preferential treatment may delight one customer but enrage or embarrass another. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.Many firms assume that customers like to feel special and to receive discretionary preferential treatments (DPT). Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. Please feel free to contact us for the most recent news in relation to the IIT reform and other tax regulations. KPMG will continue to pay close attention to the relevant circulars to be promulgated under the new IIT regime and to share our observations with GMS Flash Alert readers. Where an election is available, individual taxpayers and their tax withholding agents should plan for elections to be made in advance of the payment.In applying any preferential tax treatment, individual taxpayers and their withholding agents should familiarise themselves with the relevant qualifying conditions, including reporting requirements.The KPMG International member firm in China recommends that companies review their bonus payment schemes in advance of payment in order to mitigate unnecessary costs. Whilst the preferential tax treatment for annual bonuses will be retained during the transitional period, the “inefficient payment of annual bonus” issue remains.They should analyse the new rules when preparing their tax cost forecasts, and review their talent retention strategies and policies as well as their tax reimbursement policies. For preferential tax treatments which are subject to the three-year transitional period, companies should pay close attention to regulatory updates.In applying these preferential treatments, individual taxpayers and their withholding agents need to consider the following:
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