Taxation Planning

The tax in Hong Kong is on a territorial basis. Taxes could be exempted for profits arising in or derived from outside Hong Kong. For example, if the goods are shipped directly from one country to another country without passing through Hong Kong, and the negotiation and signing of contracts are conducted outside Hong Kong, the income earned would be able to claim offshore profit. Thus, tax could be wholly or partially exempted from profits tax in Hong Kong.

In addition, for the claim of offshore profits, the location of bank accounts is insignificant as long as sufficient documents can be submitted to prove that all business transactions are carried out outside the territory of Hong Kong.

Besides, the tax rate in Hong Kong is low and simple. The profit made in Hong Kong is subject to 16.5% tax rate only, which is far lower than that of other western countries.

In addition, there are advantages in concluding double taxation agreements (DTAs) between Hong Kong and many countries such as Belgium, Luxembourg, Mainland China, Thailand, Czech Republic etc. Most business partners in the trading industry can enjoy relief from the double taxation of income due to the territorial basis of taxation. The Double Taxation Agreement would benefit investors to easily assess their possible tax liabilities on business transactions, and also provide encouragement for foreign companies to conduct business in Hong Kong. For further details on double taxation agreements, please visit http://www.ird.gov.hk/eng/tax/dta1.htm.

Accountancy Service

According to the requirement of the Hong Kong Inland Revenue Department (IRD), every registered limited company in Hong Kong must file the tax return with an audited financial statement annually. The first tax return would be received after 18 months since the company’s incorporation date. We, Wickham Corporate Services Limited, provide professional accounting and auditing services for our clients such as preparation and filing of audited financial statements with the tax return, provision of consultation on tax issues, etc. Our associate accountant has more than 15 years’ experience in claiming offshore business. Simply keep all the bank statements and supporting documents, such as invoices, contracts and shipping documents, in good record and provide them to us, we will do the rest for you.

On the other hand, please keep proper records of all accounting documents for at least 7 years as required by the Hong Kong Inland Revenue Department.The IRD may request to check them in detail.