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Against the ever-evolving global tax environment, organisations are expected to meet compliance obligations and mitigate tax risks.
At PwC, we provide integrated tax solutions to help you stay ahead of the game. Whatever the nature and size of your business, our team of multi-disciplinary specialists have the local presence, up-to-date regulatory knowledge and sophisticated tax technology that transform your tax function into a strategic business asset.
Profits tax is payable by every company carrying on a trade, profession or business in Hong Kong on profits arising in or derived from Hong Kong from that trade, profession or business. Profits which have a foreign source (often termed "offshore profits") are thus generally beyond the territorial scope of Hong Kong's taxation system, including those derived by locally incorporated companies.
The Group Tax Review is a process that is designed to assist you in identifying the key domestic and international tax attributes of your corporate group with a view to reducing potential tax risks and exposures, minimising tax costs and creating value through the development and implementation of relevant tax management solutions. It also helps you in formulating effective strategies for optimising your corporate group's overall tax position.
Where a company has incurred capital expenditure on the construction of a building, it is entitled to claim depreciation allowances on the capital expenditure incurred. There is a significant difference between the rate of depreciation allowances applicable to the building itself and that applicable to plant and machinery therein. A depreciation review is a process used to analyse the capital expenditure incurred so as to maximise the allowances and provide robust documentation to support the claim.
The territorial concept has always been fundamental to the taxation of profits tax in Hong Kong. Only those profits which arise in or are derived from Hong Kong are liable to profits tax in Hong Kong. Here are some examples where the profits derived by a Hong Kong company may be treated as offshore sourced and non-taxable in Hong Kong.
One of the key issues facing a business operating in Hong Kong is the deductibility of funding costs. Deductions for interest and borrowing costs are subject to many practical constraints in Hong Kong.