In Hong Kong, taxation is of territorial basis. In other words, the tax is primarily levied on Hong Kong sourced income as they are derived from or arisen in Hong Kong within that basis period.
There are three major categories of taxes levied for a year of assessment which ends on 31 March, 31 December, or whatever date if selected by taxpayer. In broad term, they are Profits Tax, Salaries Tax and Property Tax respectively. In other cases, stamp duty would be levied if they fall into the respective limbs/heads of the particular section of legislation.
To individual taxpayer, if individual carries on a trade in form of proprietor or partners and receives income under any employment. The taxpayer may elect for Personal Assessment in which the taxpayer will be entitled to amalgamating his/her various incomes in a single assessment.
We are specialized in handling offshore tax cases pertinent to trading, manufacturing and service industries across different tax jurisdictions. We use professional knowledge to advise clients in formulating their tax planning scheme in more tax-effective manner. We have extensive experience in assisting clients to handle different tax query issued by IRD. If it is successfully held that the profits derived from the operations of both trading and service business are of 100% offshore nature, the assessable profits derived are completely not subject to Hong Kong Profits tax. In respect of the contract processing arrangement, if such an arrangement satisfied the 50:50 criteria stipulated in the DIPNs is agreed by IRD, only 50% of the assessable profit would be subject to Hong Kong profits tax.
In particular, our tax services are summarized as follows: