Offshore income claim involves consideration of all facts.
We extracted below cases from the tax department (Inland Revenue Department) to help demonstrating how the rules apply :
There is no single determining factor, but, below will be advantageous :
- Has no real office in Hong Kong and only uses our office as a registered office;
- Has an overseas office in which the company's directors and staff are working;
- Has no staff in Hong Kong, its staff and directors rarely come to Hong Kong, e.g. about 2 weeks per annum;
- Negotiates and concludes contracts with suppliers and customers outside Hong Kong;
- Has no HK suppliers and customers;
- Shipment does not go through Hong Kong and arrangement of shipment is not done in Hong Kong;
- Physical inspection of goods is not carried out in Hong Kong.
Having a bank account in HK to receive money is not relevant in most cases.
As the Inland Revenue Department will select some transactions and request all the documents relating to these transactions to be submitted to ensure that all the company's operations are carried out outside HK. Therefore you are recommended to keep all the correspondence for all the transactions e.g. faxes, emails, telephone bills, memos of meetings, purchase orders, sales orders, shipping documents.