In order to further develop the asset management and the related service industries, the Hong Kong Government on 17 July 2015 published in the Gazette, the Inland Revenue (Amendment) (No. 2) Ordinance 2015 (‘Amendment Ordinance’), under which the profits tax exemption for offshore funds shall be extended to private equity funds. Pursuant to the Amendment… Continue reading Profits Tax Exemption to Offshore Funds from Private Equity Funds
The OECD is currently working on a new proposal to further address the Base Erosion and Profits Shifting (“BEPS”) project. The BEPS project itself was launched to prevent multinational enterprises (“MNEs”) from the exploitation of gaps and mismatches in tax rules by artificially shifting profits from high to low or no-tax locations where there is… Continue reading The End of the Offshore Regime in Hong Kong?
Hong Kong adopts the territorial source system whereby only income arising in or derived from Hong Kong (referred as ‘onshore income’) is subject to profits tax pursuant to the general charging rule of Section 14(1) of the Inland Revenue Ordinance. In other words, income which is sourced outside Hong Kong (referred as ‘offshore income’) is… Continue reading Partial Offshore Tax Status in Hong Kong
Pursuant to the general charging provision of Section 14(1) of the Inland Revenue Ordinance (‘HK-IRO’), an income is NOT liable to profits tax (corporate income tax) if it is (i) not derived from a trade, profession or business carrying on in Hong Kong and/or (ii) not arising in or derived from Hong Kong (i.e. sourced… Continue reading Offshore Non-taxable Claim Acceptance in Hong Kong
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… Continue reading Offshore Company vs Offshore Income
The Hong Kong government plans to introduce a new tax scheme called the Tax Certainty Enhancement Scheme (“the Enhancement Scheme”), to enhance Hong Kong’s attractiveness as an international investment and business hub.
It is sometimes controversial whether conditions for an offshore non-taxable claim in Hong Kong are met. Here’s how to prepare for it.
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