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SME's

Hong Kong Budget – Further Considerations

February 10, 2010

The budget proposals issued by the Hong Kong Institute of Certified Public Accountants, The Hong Kong General Chamber of Commerce, The British Chamber of Commerce in Hong Kong and The Taxation Institute of Hong Kong always provide interesting reading. Furthermore, they give a very useful overview of the business community’s wish list for the [...]

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Budget Mania

February 8, 2010

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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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  Gradually the Assessor’s Manual has been replaced by a series of Departmental Interpretation and Practice Notes (DIPNs).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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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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Who is required to file a Hong Kong Profits Tax return?

August 31, 2009

I am frequently asked, primarily by overseas companies, under what circumstances a company, whether registered in Hong Kong or in an overseas jurisdiction, is required to file a Hong Kong profits tax return and to have its annual accounts audited.
Under Section 51 Inland Revenue Ordinance, an assessor may issue a profits tax return to any [...]

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Court of Appeal ‘Disregarded the Board of Review’ Findings on Fact in Inland Revenue vs Datatronic Limited case

July 29, 2009

The recent decision by the Court of Appeal in the case of Commissioner of Inland Revenue and Datatronic Limited, handed down on 15th July 2009, in favour of the Commissioner of Inland Revenue may not have come as a surprise to some but will undoubtedly be a cause of concern to others.  (The facts of [...]

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