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.
For employees departing Hong Kong, tax clearance is always required for you and your employer. In this article, we go in-depth about what an employer should do when an employee is leaving Hong Kong and what employees should do.
On 28 July 2021, the Hong Kong Inland Revenue Department (“IRD”) released its guidance on tax issues arising from the pandemic.
The charging provision of profits in Hong Kong, detailed in article 14 of the Inland Revenue Ordinance (IRO), might be considered as simple by ‘outsiders,’ it is far from straightforward, as the charging provision can be open to many different interpretations. As a result, even the most straightforward cases regarding capital receipts and gains can… Continue reading Aviation Fuel Supply v CIR: Capital Receipts & Gains Dispute
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
As an international trading and financial centre, Hong Kong double taxation agreements (‘DTAs’) with its trading partners are essential to provide investors certainty in respect of taxing rights and incentives for carrying on business in Hong Kong. The DTA network also stimulates the development of a mutual economy, prevents discrimination and double taxation. Apart from… Continue reading Hong Kong Double Taxation Agreements and Tax Information Exchange Agreements
The Organisation for Economic Co-operation and Development (“OECD”) has developed a raft of action plans in order to counter Base Erosion and Profit Shifting (“BEPS”). According to OECD, BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to make profits “disappear” for tax purposes or to shift profits to locations… Continue reading BEPS & Automatic Tax Exchange of Information
One should carefully evaluate the tax implications in both of your home country and the retiring country before making any decision.
The Hong Kong Inland Revenue Ordinance (“IRO”) imposes strict requirements for individual returns filings and aims at avoiding the filing of incorrect tax returns by the individuals. If those requirements are not met, the relevant punitive provisions empower the Commissioner of Inland Revenue, depending on: The nature and/or the degree of culpability of the offence… Continue reading Legal Consequences of Filing an Incorrect Tax Return
For the purpose of combating cross border tax evasion, Mainland China is one of the more than 100 tax jurisdictions which has committed to implement automatic exchange of information (‘AEOI’), by signing the Multilateral Convention on Mutual Administrative Assistance in Tax Matters in August 2013 and entering into the Multilateral Competent Authority Agreement on Automatic… Continue reading Automatic Exchange of Information for Tax Purpose in Mainland China
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