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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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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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Frustrated with Cathay Pacific and British Airways

September 1, 2009

A purely personal rant.
My frustration with Cathay Pacific and British Airways reached an all time high last night.  Having had to plead with the British Airways ground crew to allow my 12 year old daughter one small additional check-in bag, I watched as other children who were returning to school in the UK repacked suitcases [...]

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A Step Forward

July 6, 2009

Over the past 12 months there have been numerous debates as to whether Hong Kong should enter into comprehensive double taxation agreements (CDTA) with its major trading partners.
In simple terms a CDTA is an agreement that limits the circumstances when a source of income may be taxed in both jurisdictions participating in the agreement. This [...]

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Taxation without representation is tyranny …Budget reflections

July 6, 2009

When writing about tax the most frequently used quotation is that from Benjamin Franklin, “But in this world nothing can be said to be certain, except death and taxes.” However, reflecting on Hong Kong’s budget, the most apt quotation must surely be that from James Otis, “Taxation without representation is tyranny.”
Following the reading of the [...]

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The Cost of A Tax Appeal – The IRD Knows It!

July 6, 2009

Hong Kong’s objection and appeal procedures against tax assessments raised by the Inland Revenue Department (“the Department”) can be costly should a taxpayer wish to pursue his right of objection.
Firstly, if a taxpayer wishes to appeal against an assessment, he may be required to purchase a tax reserve certificate (“TRC’s”). Notwithstanding that it is estimated [...]

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The Inland Revenue Department Seek to Penalise Delinquent Tax Filing

June 29, 2009

The Inland Revenue Department (’the Department) has recently issued a number of Form IR 1254 letters advising the recipient that, “According to our information, you have failed to file your tax return by the due date.”
The letter then continues, “If the Department had not detected the failure, tax would have been undercharged.”
The Department then points [...]

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Tax Free Perks for All

June 26, 2009

I was delighted to receive a question from a reader of my ‘Rants’.  I have to admit that I was more surprised to learn that people read my blog rather than the fact that people would like to have questions answered.
The reader rightly enquired whether Government employees/ legislative councilors clearly using Government vehicles for their [...]

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Hidden Taxes

June 23, 2009

By this time of year I have normally filed my salaries tax return and have calculated the amount I will have to pay next January.  At first blush it may not seem to be a significant percentage of my earnings however the reality is that the salaries tax we all pay is only part of [...]

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Hong Kong is NOT a Tax Haven

April 20, 2009

The Government has clearly stated that it will enact legislation to amend the Inland Revenue Ordinance in order to allow the Inland Revenue Department to share information with overseas tax authorities, in other words acceding to the demands of the Organisation for Economic Co-operation and Development (OECD) to sign up to international agreements facilitating tax [...]

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