RoddysRant.com

Budget Mania

by Roddy Sage on February 8, 2010

in Uncategorized

It is that time of year when people, typically tax partners of the larger accounting firms, attempt to predict the Hong Kong Government’s budget surplus/deficit for the current year. This is often accompanied by a call for a reduction in the rate of profits tax, i.e. the corporate tax rate. Experience has shown [...]

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Changing of the Guard

by Roddy Sage on January 13, 2010

in Uncategorized

Mrs Alice Lau Mak Yee-ming retired as Commissioner of Inland Revenue with effect from 6th December 2009.  Mrs Lau has been replaced by Mr Chu Yam-yuen, previously the Deputy Commissioner of Inland Revenue.
Mr Chu became an Assistant Assessor in July 1975 and has been employed by the Inland Revenue Department (“IRD”) ever since.  Mr Chu [...]

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Hong Kong Transfer Pricing Guidelines

January 13, 2010

In December 2009, the Inland Revenue Department (“IRD”) issued its Practice Note No. 46 – “Transfer Pricing Guidelines – Methodologies and Related Issues”.  The 35-page document plus 17-page appendix provide a detailed insight into the approach the IRD will take to negate perceived Hong Kong tax benefits derived from abusive [...]

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Locality of Profits

January 13, 2010

In December 2009, the Inland Revenue Department published the revised Departmental Interpretation and Practice Note No.21 (Revised) – “Locality of Profits”.
The determination of the location of a source of a given profit has caused some disputes between taxpayers and the Inland Revenue Department.  It is clear that the source of a profit is “what the [...]

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Why an Audit?

January 11, 2010

One of the more frustrating aspects of Hong Kong company law is that all Hong Kong-incorporated companies require an audit, irrespective of the value of the company’s turnover, the number and nature of its shareholders etc.  By comparison, a Singapore Exempt Private Company, i.e. a company with not more than 20 shareholders (none of whom [...]

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Misled By The Inland Revenue Department?

November 18, 2009

When I arrived in Hong Kong in the early 1980’s obtaining a copy of the Inland Revenue Department’s Assessor’s Manual was considered essential, but extremely difficult to acquire.  Gradually the Assessor’s Manual has been replaced by a series of Departmental Interpretation and Practice Notes (DIPNs).  Whereas the Assessor’s Manual had [...]

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2010 Budget Wish List

November 9, 2009

With Hong Kong’s budget only four months away, give or take a few weeks, now is the time to make your own views known to the Financial Secretary, Mr John Tsang.
People may consider this a futile exercise, but in my opinion this is far from being the case.  The 2009 budget lacked substance, or at [...]

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Source of Profits - DIPN 21 Needs Amendment

October 22, 2009

Disagreements between the Inland Revenue Department (”the Department”) and taxpayers as to whether a particular source of profit accruing to a business carried on in Hong Kong is derived from Hong Kong, and therefore taxable, arise all to frequently. It would be foolish to believe that this uncertainty is ignored by persons contemplating establishing [...]

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Why Reduce The Tax Rate?

October 6, 2009

I read with interest that the Hong Kong General Chamber of Commerce believes that it is essential to reduce the rate of profits tax, the tax on business profits, to 15% in order to enhance Hong Kong’s competitive position. I question whether a reduction in the rate of profits tax is that important in [...]

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US tax snoops zero in on Hong Kong? Let’s be realistic.

September 28, 2009

Nick Westra’s article in this week’s Sunday Morning Post (September 27th, 2009) must have pleased the IRS.  If anything is going to raise concern amongst US citizens living in Hong Kong it is exactly this type of suggestion that a foreign authority will have unrestricted access to information.  The article appears to ignore the fact [...]

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