Hong Kong Tax News Flash

Mar 2018, Issue 3

The IRD’s latest comments on profits tax and stamp duty issues

In the 2017 annual meeting between the Inland Revenue Department (IRD) and the Hong Kong Institute of Certified Public Accountants (HKICPA), the IRD expressed its views on a number of profits tax and stamp duty issues, including:

  • the interpretation and application of the offshore funds tax exemption regime; 
  • the interpretation and application of the concessionary tax regime for corporate treasury centers (CTCs); 
  • tax implications of converting a legal practice into a limited liability partnership (LLP);
  • tax treatment for leases under the new accounting standard; 
  • various matters relating to the implementation of the Common Reporting Standard (CRS) in Hong Kong; and
  • associated relationship for intra-group stamp duty relief in amalgamation cases.

While the meeting minutes are not law and are not legally binding, the minutes serve as a good reference of the IRD’s stance on various emerging tax issues. In particular, this year’s minutes have shed some light on the IRD’s interpretation and application of the concessionary tax regimes for offshore funds and CTCs. Companies currently enjoying or planning to enjoy these concessionary tax regimes should take into account the views expressed by the IRD in the meeting minutes and assess how to best structure their business models and operations going forward.

Contact us

Charles Lee
China South and Hong Kong Tax Leader, PwC Hong Kong
Tel: +[852] 2289 8899

Jenny Tsao
Hong Kong Retail and Consumer Tax Leader
Tel: +[852] 2289 3617

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