Hong Kong adopts territorial source tax system, whereby only income arising in or derived from a trade, profession or business carrying on in Hong Kong is subject to taxation. In other words, a company incorporated in Hong Kong is potentially exposed to Hong Kong corporate tax on profits but it can lodge an offshore non-taxable claim for its offshore sourced profits.
On the other hand, a company incorporated outside of Hong Kong and which has carried on business in Hong Kong and earns Hong Kong sourced profits is rather likely to have the tax reporting obligations in Hong Kong.
We assist our clients in managing their international tax exposure. We can provide comments and suggestions on how to strengthen a proper offshore arrangement. Our tax advisors also assist clients in complying with the relevant local tax rules and regulations in Hong Kong.
- Profits tax return filing
- Handling profits tax enquiries from the tax authorities
- Lodging objections against the profits tax assessments issued by the tax authorities
- Lodging application for holding over the professional tax charged by the tax authorities
Contact us to learn more about our services
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Transfer Pricing15 January 2021
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 Kong5 January 2021
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
Advance Rulings in Hong Kong28 December 2020
Why you may want Advance Rulings on Tax? Advance rulings on tax, a kind of tax insurance, help to reduce the tax risks companies may face. This, as for most investors and their management, potential tax liabilities and tax risks that may arise within the company remains a concern when conducting their businesses. As… read more