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FAQ > Business Tax in Hong Kong > B27

Q: Are there any tax rules that are specifically relevant to offshore companies? View : 66
A:

Basically, offshore companies and Hong Kong companies are treated in the same way. However, if a company is a non-resident, the following should be noted:

(a) A non-resident is chargeable to tax either directly or in the name of his agent in respect of his Hong Kong sourced profits from a trade, profession or business carried on in Hong Kong. The tax may be recovered out of the assets of the non-resident or from the agent and the agent is required to retain from the non-resident's assets sufficient money to pay the tax.

(b) A non-resident receiving royalty income as described in the answer to question 15 is subject to profits tax in the way explained therein.

(c) A local person (including a company) who sells goods in Hong Kong on behalf of a non-resident shall furnish quarterly returns to the IRD showing the gross proceeds from the sales and at the same time pay to the IRD a sum equal to 1% of the sales proceeds, or such lesser sum as may have been agreed by the IRD.

(d) Where a non-resident carries on business with a closely-connected resident person and the business is so arranged that it produces to the resident person either no profits or less than the ordinary profits, the business may be deemed to be carried on in Hong Kong by the non-resident through the resident person as his agent.

(e) Where a non-resident receives sums directly or indirectly from the performance in Hong Kong by a non-resident entertainer or sportsman, special procedures of assessment and collection of tax would apply. For more details, see pamphlet: “Taxation of non-resident entertainers and sportsmen in Hong Kong”, which can be downloaded from the IRD's website at http://www.ird.gov.hk/eng/pdf/pam48e.pdf

It should however be noted that whether a company is a non-resident is largely a question of fact and that not every offshore company is regarded as a non-resident.

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