As expected, on 5 October 2021, Hong Kong and a few other jurisdictions* have been placed on the Grey List of Non-Cooperative Tax Jurisdictions (“Grey List”) by the European Union (“EU”). This is due to the EU’s concerns of double non-taxation of foreign-sourced passive income, such as interests and royalties, under Hong Kong’s territorial source system.
Certificate of Resident Status (CoR) (居民身分證明書) is a document issued by the Hong Kong Inland Revenue Department (IRD) stating that the applicant, who can be an individual or an entity, is a Hong Kong tax resident under the double tax agreement (DTA) between Hong Kong and a particular foreign tax jurisdiction for a particular calendar… Continue reading A Guide to obtaining Certificate of Resident Status in Hong Kong
One can potentially enjoy a significant withholding tax saving on the distribution/payment of dividends, interests or royalties from out of Mainland China by applying the Mainland China DTAs, subject to certain conditions.
The Comprehensive Avoidance of Double Taxation Arrangement between Hong Kong and Macao (“CDTA-HK/MC”) is the latest of Hong Kong 45 international double taxation agreements. It has entered into force on 18 August 2020. It will be applied in Macao and Hong Kong as from 1 January 2021 and 1 April 2021 respectively. This agreements follows… Continue reading Double Taxation between Macao and Hong Kong Arrangement In Force
On 19 August 2020, the government of the United States (“the US”) announced that the agreement in respect of double taxation relief on income derived from the international operation of ships entered into between the US and Hong Kong (“the Agreement”) has been terminated which will revert Hong Kong to the general shipping income tax… Continue reading Termination of the Shipping Income Tax Agreement Between the United States and Hong Kong
When however collecting this information for the purpose of acquiring a certification of residence status for the Hong Kong company under the Hong Kong – Spain double taxation treaty, the obtained information is likely to be ignored by the HK IRD as it is irrelevant for the application of the relevant double taxation treaty.
This strategic move can be driven by various motivations, such as optimising the capital structure, returning surplus funds to shareholders, or eliminating accumulated losses.
For many multinational companies, Hong Kong remains the preferred bridge between Asia-Pacific opportunity and Western capital. Competitive base salaries help attract talent, yet it is the carefully structured fringe benefits package that often seals the deal. Under Hong Kong’s Salaries Tax regime, however, every non-cash perk must be weighed against the Inland Revenue Department’s rules—principally… Continue reading Fringe Benefits and Tax Efficiency in Hong Kong for International Employers
Whether you’re an individual investor or running a company with investment activities, understanding how investment income is taxed (or not taxed) in Hong Kong can make a real difference to your bottom line.
Pursuant to the Enterprise Income Tax (‘EIT’) Law in Mainland China, capital gains derived by non-resident enterprises from the transfer of directly held equity interest in (i) Chinese resident entities or (ii) movable/immovable properties in Mainland China (collectively referred as the ‘Interest in Mainland China’) are generally subject to capital gain tax in Mainland China.… Continue reading Indirect Transfer of Properties in Mainland China by Non-resident Enterprises
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