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.
In Board of Review/Tax Tribunal Case X66, several appellants brought appeals to the Board of Review (“BoR”) under section 66 of the Hong Kong Inland Revenue Ordinance (“HK IRO”). For easy reading, Case X66 described below has been limited to one appellant only but this case shows similar points regarding the importance of tax substance.… Continue reading The Importance of Corporate Tax Substance
It is sometimes argued that a company incorporated under HK Law (“HK Co”) will (a) automatically be regarded as a Hong Kong tax resident; and (b) only be subject to corporate tax in Hong Kong but not in other tax jurisdictions. However, one has to be well aware that if HK Co lacks (has insufficient) ‘tax… Continue reading Economic Substance in Hong Kong
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