Team Schwaller

It means that the companies of Hong Kong are subject to the taxation only in the event that incomes are received from a source in Hong Kong. If the company did not conduct activity in territory of Hong Kong and did not receive incomes of sources in Hong Kong, it is not subject to the taxation.

The main act is the Law on internal incomes (Inland Revenue Ordinance). It provides application of four kinds of surtax:
- The profit tax,
- The tax to wages,
- The tax to the real estate,
- Taxes to the percentage income.

The greatest value in the international tax planning has the profit tax which will be considered in given article in more details.

In Hong Kong there are no taxes to a capital gain, dividends, percent, the royalty received from abroad or sent abroad. The profit tax rate, for the companies conducting activity in Hong Kong, makes 17,5 %.

For clearing of the profit tax in practice the company should correspond to following criteria:

- The company has no stationary place of conducting activity in Hong Kong, for example, office, shop, workplaces,

- The realized goods should not be made in Hong Kong;

- There are no the employees working in territory of Hong Kong,

- Contracts consist and executed out of limits of Hong Kong,

- Transportation of the goods should be carried out between the ports located out of limits of Hong Kong.

The foreign monetary commissions and the fees received from licenses, concerning music, films, incomes of patents, publications of materials, the rights to mining operations, consulting services, incomes of rent are not subject to the taxation in Hong Kong.

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