Offshore income claim is not automatic. It needs to be applied.
It can be done by 2 ways :
- Advance Ruling
- Before you start the operation, write to HK tax department (IRD), describe your intended operation and request for "Advance Ruling";
- Example of advance ruling = [ Example ]
- Tax Filing
- 1 st filing request will normally issued by tax department around 18 months after company incorporation date;
- Usually the company has around 3 months to handle the filing;
- The period to cover is usually from incorporation date to 31/3 of next year;
- Therefore, the company can also start arranging the filing work - even the filing request is not issued yet.
- What documents are required for Tax Filing ?
| Item 1 : || Financial Statements; |
| Item 2 : || Auditor’s Report |
| Item 3 : || Tax computation |
| Item 4 : || Offshore operation tax exemption application |
For a company does not need to apply for tax exemption, only Item 1 , Item 2 and Item 3 are required to submit to Hong Kong tax department.
When tax exemption application is required, Item 4 is required as well.
In Item 1 , all income (onshore and offshore) of the taxpayer company should be reported.
In Item 2 , statutory audit is required for every limited companies incorporated in Hong Kong;
In Item 3 , tax payable needs to be calculated according to tax rules in HK;
In Item 4 , at least below 2 document sets are included :
- Organization chart (Company function structure) showing which function is performed offshore
- Walk-Through document example of a deal showing how an offshore income business is handled. (please select one of the largest in amount and typical);
If apply for tax exemption without giving sufficient information. Tax department will issue a letter asking for proof. [ Document Sample ]