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Hong Kong Tax News Flash 

Nov 2014, Issue 13

The latest IRD’s views on important profits tax issues


In the 2014 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 tax issues in the domestic and treaty context that are of interests to taxpayers. This News Flash is the first of the two issued to summarise the more important corporate tax issues discussed in the meeting. It covers the following profits tax issued discussed in the meeting: (1) source rule for dividends/ distributions; (2) deduction of share-based payment and recharge; (3) application of the anti-avoidance provision on transfer of a tax loss company; and (4) taxation of Hong Kong investment managers/advisors. The next News Flash will cover issues concerning the interpretation and application of tax treaties discussed in the meeting.

While the meeting minutes are not law and taxpayers can hold a different view from those expressed by the IRD in the meeting, the minutes serve as a good reference of the IRD’s stance on various tax issues. Companies with business operations in Hong Kong or doing business with Hong Kong should take into account the views expressed by the IRD in the meeting minutes in both of their tax planning and tax filing processes for an effective management of their tax matters.

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Contacts
Reynold Hung
China South and Hong Kong Tax Leader
Hong Kong
Tel: +[852] 2289 3604 Email
Oscar Lau
Partner
Hong Kong
Tel: +[852] 2289 5603 Email