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| Tax Planning In Hong Kong | |||||||
Tax planning in Hong Kong is simple compared to other international jurisdictions due to it's simple tax laws and relatively low tax rates. Important considerations for planning tax in Hong Kong include:
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1.
| Tax planning in Hong Kong has the appeal of no capital gains taxes, withholding taxes, annual net worth taxes and accumulated earnings taxes on companies that retain earnings rather than distribute them. Furthermore, when paying tax in Hong Kong, entrepreneurs can benefit from the absence of goods and services tax (GST) and value added tax (VAT). | ||||||
2.
| When tax planning in Hong Kong, investors should note that, in accordance with Hong Kong Companies Ordinance, each company must submit an annual tax return and audited financial statements to the Inland Revenue Department.
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3.
| Entrepreneurs in Hong Kong should note that local and international dividends accounted for in a Hong Kong company are legally tax-exempt. Consequently, a Hong Kong company is one of the most attractive international investment companies in the world. | ||||||
4.
| Foreign investors should note that Hong Kong corporation tax is a flat rate of 17.5% on trading profits earned in Hong Kong. International profits accounted for in a Hong Kong company will not be subject to Hong Kong corporation tax if certain conditions are met. One such condition is that the international income must not be remitted to a Hong Kong bank account. | ||||||
5.
| Consequently, foreign direct investment (FDI) in Hong Kong reached US$56 billion in 2007 (US$45 billion in 2006). Corporate profits tax is expected to be trimmed by one percentage point every two years for the next 10 years. | ||||||
6.
| When tax planning in Hong Kong, investors can be hindered by the fact that Hong Kong has signed limited double tax agreements with China, the USA and Belgium. This is an important reason why a Hong Kong company is the preferred global corporate structure. | ||||||
7.
| The Inland Revenue Department (IRD) is the governing authority of tax administration in Hong Kong. | ||||||
| Contact Us | |||||||
For more information on tax planning in Hong Kong, email email@healyconsultants.com or call us in Hong Kong at (+852) 8331 1911. | |||||||
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