Internal Revenue

Company names may be in English only, Chinese only or in both languages simultaneously. The Company can not be registered under the name that is identical to the name existing company. Taxation of Companies in Hong Kong. Hong Kong's taxation system was formed on the model of English and largely inherited the principles of a complex of measures in the British Commonwealth tax policy, adopted in 1947. In Hong Kong there is no division in the company of resident and nonresident, and adopted the principle of territorial taxation. This means that the Hong Kong company to be taxable only in that case, if the income derived from sources in Hong Kong. If the company had no activity in Hong Kong and received no income from sources in Hong Kong, it is not taxable.

The main legislative act is the Law of Internal Revenue (Inland Revenue Ordinance). It provides for the use of four types of income taxes: – income tax – payroll tax – property tax – taxes on interest income. The greatest value in international tax planning is the income tax, which will be discussed in this paper in more detail. In Hong Kong there are no taxes on capital gains, dividends, interest, royalties received from abroad or sent abroad. Income tax rate for companies operating in Hong Kong, is 17.5%. For exemption from income tax, in practice, the company must meet the following criteria: – The company has no fixed place of business in Hong Kong, for example, office, shop, jobs – traded goods should not be made in Hong Kong – None staff working in Hong Kong, – contracts entered into and performed outside Hong Kong, – transportation of goods between ports should be located outside Hong Kong.

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