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 Hong Kong profits tax. In other words, a company incorporated in Hong Kong is potentially exposed to Hong Kong profits tax 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 (inter)national 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. In summary:
- 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
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Is it a silver lining for Hong Kong’s commercial property market?27 November 2020
On 25 November 2020, the Chief Executive, Mrs Carrie Lam, announced in her Policy Address to abolish the Doubled Ad Valorem Stamp Duty (“DSD”) on non-residential property transactions, with effect from 26 November 2020. Accordingly, any chargeable instruments on non-residential property transactions executed on or after 26 November 2020 will be subject to Stamp Duty… read more
Hong Kong as a safe harbor amid the “attack of debt tsunami”25 November 2020
The Institute for International Finance (“IIF”) recently warned of the “attack of the debt tsunami” as a result of the unprecedented fiscal and monetary stimulus packages implemented by governments around the globe pushing the global debt levels to a new high of more than US$ 272 trillion in the third quarter of 2020. The IIF… read more
Is a freelancer considered as carrying on a business in Hong Kong?12 November 2020
Freelancers may see themselves as a causal employee working with different employers without committing his/her full time to them. However, without any relationship of “master and servant”, if the freelancer’s income is derived from providing professional or personal services in Hong Kong, he/she will be considered as carrying on a business and a self-employed person…. read more
Rising concerns for Hong Kong taxes due to covid-1911 November 2020
Due to the COVID-19 pandemic, governments have taken unprecedented measures such as implementing strict quarantine requirements and/or travel restrictions. As a result, senior executives who are used to travel frequently may now be forced to stay much longer in a host country than usually or even get stranded there. This situation may raise significant tax… read more