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Hong Kong tax

Offshore Profits – Re-invoicing Trough Hong Kong

October 26, 2010

The change in practice by the Inland Revenue Department (“the Department”) regarding the assessment of profits booked in a re-invoicing vehicle located in Hong Kong continues to be a cause for concern.
Paragraph 27 of the Departmental Interpretation and Practice Notes No.21 (Revised), dated December 2009 (“DIPN”), clearly states that it is [...]

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2011-2012 BUDGET SUBMISSIONS

October 7, 2010

We are rapidly approaching the time of year when the various professional bodies, chambers of commerce, business associations etc. need to consider the content of their submissions to the Financial Secretary, The Hon John Tsang Chun-wah, on the Government’s budget for the fiscal year 2011-12.
Having been involved in this process [...]

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Hong Kong and Ireland Sign a Comprehensive Double Taxation Agreement

June 24, 2010

Hong Kong signed a Comprehensive Double Taxation Agreement (“CDTA”) with Ireland on June 22, 2010.  This is Hong Kong’s 13th CDTA.
Secretary for Financial Services & the Treasury, Professor Chan commented that “the agreement will encourage Hong Kong enterprises to leverage on the success of Irish companies in the [...]

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Hong Kong Issues Guidelines on the Exchange of Tax Information

June 22, 2010

On June 9, 2010, the Inland Revenue Department (“the Department”) published its Departmental Interpretation and Practice Note No 47 “Exchange of Information under Comprehensive Double Taxation Agreements”. Although, as I have previously noted, the Department does not feel bound by its own Practice Notes, they nonetheless provide genuine guidance as to the normal Departmental [...]

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Hong Kong / Austria CDTA – Double Taxation Treaty Update

June 22, 2010

Hong Kong concluded a Comprehensive Double Taxation Agreement (“CDTA”) with Austria on May 25, 2010.  This is Hong Kong’s 11th CDTA, and provides for the reduction of withholding tax on dividends to 0% if the beneficial owner is a company that directly holds at least 10% of the capital of the [...]

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Hong Kong Concludes Two More CDTAs

May 17, 2010

The Inland Revenue Department signed comprehensive double taxation agreements with Hungary and Kuwait on May 13, 2010.  This takes to 10 the number of comprehensive double taxation agreements that Hong Kong has signed.  With agreements having been reached with a number of other countries, including Austria, France, Ireland, Japan, Switzerland [...]

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Changing of the Guard

January 13, 2010

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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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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Expat trapped in Hong Kong

September 25, 2009

Is it time for Hong Kong to overhaul its tax collection methods? Multi million dollar losses suggest it is.

The article, ‘Expat Trapped in Hong Kong over unpaid tax bill’ that appeared in last week’s issue of The Sunday Morning Post highlighted an interesting problem for the Hong Kong Inland Revenue Department.
The piece tells the story [...]

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Meet Deadlines to Avoid Penalties

July 21, 2009

The Inland Revenue Department (“the Department”) appears to have become so frustrated with delinquent taxpayers and those that persistently miss tax filing deadlines that it has resorted to issuing a standard letter advising taxpayers that for such offences the Department is allowed to raise penalties of up to 3 times the amount of unpaid tax [...]

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