January 2021

Offshore Company vs Offshore Income

For years, people have incorporated offshore entities for the benefit of asset protection, privacy or tax reduction. Although an offshore company is a popular vehicle for people to carry a business from, it is surprising to see how many people tend to mix up the concept of an offshore entity with the concept of an… read more

Hong Kong Tax Audit & Disputes

The tax system in Hong Kong is simple but not straight forward. In Hong Kong where the territorial source system is adopted, one of the most controversial tax issues is whether or not an income is arising in or derived from Hong Kong (i.e. sourced in Hong Kong) and hence subject to Hong Kong income… read more

Transfer Pricing

Transfer pricing (“TP”) refers to the setting of prices for transactions of goods, services and intangible property between associated enterprises. Globalisation has increased the number of cross-border transactions between associated enterprises. This has also created opportunities for cross-border tax avoidance by taking advantage of differences in tax regimes across jurisdictions. This problem is commonly referred… read more

Tax Substance in Hong Kong

It is sometimes argued that a company incorporated under HK Law (“HK Co”) will (a) automatically be regarded as a Hong Kong tax resident for tax purpose; and (b) only be subject to profits tax in Hong Kong but not in other tax jurisdictions. However, one has to be well aware that if HK Co lacks… read more

Hong Kong General Anti-Avoidance Rules

What are they? Are they really dangerous? The more SAAR, the less GAAR? In Hong Kong, we are somehow in the very ‘luxurious’ position not to have only 1 General Anti-Avoidance Rule provision (“GAAR”), but even to have 2 GAAR provisions. The first GAAR provision can be found in section 61 of the Hong Kong… read more

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