Hong Kong

7 Chapter Tax

    • Outline

      The characteristic of Hong Kong tax system is the taxation system is simpler compared to Japan. The taxes are small and their tax rate is kept in low. The taxation countermeasure measures to avoid the double taxation (tax exemption method) are also a major feature. However, it is obligatory to hold the board of directors, audit accounting and declare tax.

      The thing to keep in mind here is that Hong Kong is fundamentally different from countries that are completely tax free and no equivalent of corporate law. It should be regarded as an enforcement area only for tax incentives for economic activities that contribute to health and global corporate activities.


      In this chapter we will explain the tax system and contents in Hong Kong.


      Characteristics of tax

      Hong Kong was returned to China on July 1, 1997, but for economic, legal and social institutions, the principle of so-called "one country two system" is applied for 50 years after the return. Therefore, in Hong Kong, the taxation system is maintained rather than the Chinese tax system.


      Besides being a low tax rate in Hong Kong's tax system, it has the following characteristics.


      · Simple tax system

      · Avoid double taxation by tax exemption method

      · Withholding tax system

      · Planned tax payment system

      · Payment tax payment system

      · Direct tax and indirect tax




      [Simple tax system]

      There is no tax applicable to local tax, consumption tax, inhabitant tax, and there is a policy not to make tax itself as much as possible because Hong Kong's taxes are very small, and there are no orders or judicial precedents.

      As for the consumption tax, an introduction plan was planned in 2006, but there was a history that it was withdrawn in 2007 because casino and other incomes are abundant and it is not necessary as tax revenue.


      [Avoidance of double taxation by tax exemption method]

      Only onshore income (withholding income in Hong Kong) is taxable.

      In principle, all offshore income (income earned outside Hong Kong) will be tax exempted. In addition, individuals and corporations are not taxed on dividend income.


      [Withholding system]

      In Hong Kong, we do not adopt withholding system except for a few exceptions such as nonresidents (payment of royalties to nonresidents, etc.).


      [Scheduled tax payment system]

      We have adopted a planned tax payment system for Hong Kong residents. The planned is that the tax payment system is a system that pays the amount of tax payment for the next term in advance in approximate amount based on the income for this term.


      [Payment tax payment system]

      The taxation authority will decide the payment tax amount. Taxpayers themselves calculate the tax amount at the time of filing the final tax returns, but it is only a reference level.


      [Direct tax and indirect tax]

      The direct tax of Hong Kong falls under corporate income tax, salary income tax and asset income tax. For indirect tax, stamp duty, excise tax, vehicle registration tax, etc. fall under.

    • Hong Kong`s Tax Law

      There is no national tax in Hong Kong therefore, all taxes are local taxes.

        Hong Kong Internal Revenue Code

      According to the Internal Revenue Code established in 1947, various provisions are set for Hong Kong taxes (direct taxes) on each income.


      For each item, it is as follows.


      Provisional items: provisional income tax, interim corporate income tax, provisional real estate income tax, objections etc., such as real estate income tax, salary income tax, corporate income tax, special deduction, personal deduction, depreciation, individual total taxation, double taxation avoidance, Petition and appeal, tax payment and collection, refunds, penalties and violations

    • Outline

       Personal income tax on Hong Kong is taxable only within Hong Kong.


      Taxpayer of salary income tax

      According to the Internal Revenue Code, income tax payable obliged to considered to be income based on employment, position or pension of Hong Kong source in that tax year.

      Exemption will be granted if the source of employment is outside Hong Kong and the stay within Hong Kong is within 60 days for 1 taxation period.

      In addition, the 1 taxation period is considered to be 12 months starting from April 1.


      Determination of Salary Income

      Judgment of salary income is based on whether the next point is within Hong Kong and whether it is due to employment. If the next point is within Hong Kong, the Hong Kong’s domestic source income will be considered.


      · Conclusion of employment contract

      · Employer's address

      · Payment place of salary


      In addition, it is necessary to pay attention to the following points.


      · Since it is judged based on real standards, even if formally removing requirements out intentionally, it may be regarded as Hong Kong source

      · When all operations are done outside Hong Kong, it is not considered to be Hong Kong source

      · If the source of the employment contract is outside Hong Kong and the number of days of stay in Hong Kong exceeds 60 days, the source of Hong Kong source will be prorated based on the number of days stayed

      · If the source of employment contract is outside Hong Kong and the number of days of stay in Hong Kong is 60 days or less, it is not regarded as a Hong Kong source as a short-term stay


      Taxable items

      The salary income tax subject to tax is as follows.


      · Wages

       · Salaries

      · Vacation allowances etc.

      · House rent paid by the company (the actual rent does not become income, but the amount obtained by multiplying the total salary multiplied by the fixed rate is regarded as taxable income)


      In addition, if executive remuneration is provided by a Hong Kong company, it will be regarded as domestic source income in Hong Kong. If pension income is also operated and managed in Hong Kong, it is regarded as domestic source income in Hong Kong.


    • Calculation outside income tax


      Calculation method of salary income tax amount


      The tax amount of the salary income tax shall be lower the amounts calculated by the standard tax rate method and the progressive taxation method, whichever is lower.


      Standard taxation system

      Tax = Taxable income × 15%


      Progressive taxation system

      Tax amount = net taxable income × progressive tax rate


      Calculation of taxable income

      Among employment income, director compensation income or pension income of Hong Kong source, the net taxable income is calculated as follows.


      [Calculation of net taxable income]

      Net taxable income = taxable income - deduction - human deduction




      [Donation deduction]

      Donations to certified donors can be deducted from taxable income.


      Requirements are as follows.


      · It must be a donation of 100 HK dollars or more

      · 35% of taxable income is upper limit


      [Person deduction]

      The types of human deduction and the amount of deduction are as follows.





      Taxable income is used for the standard tax rate method, whereas the progressive taxation method uses net taxable income because of the merits of deduction and progressive taxation, progressive taxation method is more advantageous unless it is a very large taxable income.


      [Calculation example of income tax rate]

      · Mr. A: with spouse, without children

      · Mr. A's salary (year) 600,000 HK dollars

      · Company burden rent (3 LDK, year) 400,000 HK dollars (internal self-payment amount of 20,000 HK dollars / year)

      · Previous year income tax amount of company burden of 55, 200 HK dollars



    • Declaration and Payment Procedures

       Declaration Procedure

      In the case of hiring employees in Hong Kong, the company is obliged to submit first notice of an employment to the tax authorities within three months after the start of employment.

       If this notice is properly submitted, an employer return will be sent to the employer at the beginning of April every year, and a salary income return will be sent to the individual with salary income every year in early May of every year


      It will be because the deadline for submission of each declaration is within one month from the date each declaration was sent, usually the employer declaration is to be completed by the end of April and the salary income return by the end of May.

      You have to fill in and sign it before submitting it. For employer declaration form, it is necessary to submit with employment payment compensation declaration form.

      Likewise, even if an employee retires, if it is necessary to notify the Hong Kong Taxation Bureau and the retired employee remains within Hong Kong, a notice of termination of employment one month before the date of stopping payment of payment, if a retired employee leaves Hong Kong outside, you must submit a departure notice letter one month before departure.


      Payment Procedure of Tax

      In general, payment of the payroll tax will be paid in the month of January and April of the following year based on a letter notice sent to each employee from October to December every year. Hong Kong's salary income tax is characterized by planned tax payment for the following year based on the same amount as the income amount for this fiscal year. We pay 75% of the planned tax payment in January the next year and pay the remaining 25% in April of the following year. In this case, there may be a difference between the fixed tax amount of this fiscal year and the planned tax payment amount. The way of processing about this difference is as follows.


      Confirmed tax amount for this fiscal year> Planned taxed amount in the previous year

      ➡ In the following January pay in conjunction with the planned tax payment for the following fiscal year


      Confirmed tax amount for this fiscal year <Planned tax amount in previous year

      ➡ Offsetting the planned tax payment amount of the following fiscal year, even if it still exceeds it will be refunded


      In the case of the first year of filing a declaration, we will pay two years for the fixed tax amount for this fiscal year and the scheduled tax payment for next year.


    • Outline

       Just like a personal income tax, a corporation with source in Hong Kong is taxed, and corporations with source outside Hong Kong are tax exempt.



      Income from corporate activities, partnerships and other organizations' activities in Hong Kong is subject to corporate income tax. The important thing in this judgment is whether or not you are doing business in Hong Kong and it does not matter whether the location of the corporation etc. is in Hong Kong or not. Also, as long as the representative office is not accredited as conducting business activities, taxpaying obligation usually does not occur.

    • Calculation of taxable income


      Calculation of taxable income in Hong Kong is calculated by deducting all deductions from all gains on business attributable to one accounting period. Specifically, we calculate by adding or subtracting tax adjustment items to pre-tax profit on accounting based on Hong Kong's accounting standards. It is the same as the method of tax calculation in Japan.


      Taxable gains

      In general, money is an accounting benefit, but in exceptional cases, the following taxable income is not included in gross profit.


      ·Dividend income

      · Bank deposit interest in Hong Kong

      · Offshore income

      ·Capital gain


      Deduction calculation

      In Hong Kong's corporate income tax, in principle, expenses to be deducted are stated as costs incurred to acquire taxable income. Regulations are as follows.


      [Calculation of Depreciation Expenses]

      In Hong Kong, we calculate tax depreciation expenses separately from accounting and we will include all deductible expenses. The accounting depreciation expense is calculated on the basis of accounting and taxation because the company uniquely determines a reasonable estimate useful life and requires calculations with regulations but the useful life for tax is determined by the tax law Because the calculation of depreciation is calculated in a completely different way.

      It should be noted that the useful life of the accounting is different from the tax useful life.


      Industrial Building

      Factories used for manufacturing etc., warehouses storing products, etc. fall under. Industrial buildings are amortized using the straight-line method. The depreciation rate is 4%. In the first year, we will make a special depreciation of 20% of construction cost as depreciation on acquisition. For the next and subsequent years, we will write off at 4% of the unamortized balance of construction costs.


      Commercial building

      This is applicable to buildings used for business such as office. Commercial buildings are amortized using the straight-line method. The depreciation rate is 4%. Depreciation is not permitted at the time of acquisition and will be amortized from the first year to 4% of the unamortized balance of construction costs.


      Machine equipment etc.

      Machinery equipment, tool equipment, etc. are applicable. Machinery and equipment are amortized by the declining-balance method.

      The depreciation rate is divided into 10%, 20% and 30% of the unamortized balance for each asset group. In the first year, we will make a special depreciation of 60% as depreciation on acquisition. In addition, it is possible to make a lump-sum depreciation at the time of acquisition regarding environmentally-conscious products, machinery facilities etc. required for manufacturing (qualified machinery / equipment). Eligible machinery equipment is 100%, qualified installation facilities are depreciated by 20% straight line method over 5 years.


      [Various provisions]

      It is possible to deduct as long as the amount can be estimated almost accurately for the debts that have already occurred, but you must obey the judgment of the tax bureau.


      [Entertainment expenses]

      If it was expended to generate taxable income of corporate income tax, it can be included in the total deductible. In other words, in addition to being able to grasp the business partner and the other party, it is possible if the receipt is complete.


      [Credit loss]

      If the tax office does not approve that the obligor is uncollectible due to bankruptcy declaration, such as dissolution and closure, it cannot be included in deductible expenses.


      [Carry-forward of losses]

      Since there is no carry-over deadline for the carry forward loss, it can be used without limit. However, if there is no operating revenue after the establishment of the company and only expenses are incurred, attention should be paid because there is a possibility that it is not recognized as a loss.


      Tax-free income

      [Offshore income]

      Offshore income means income earned outside Hong Kong. In Hong Kong, offshore income is tax-exempt in principle. This is called offshore income exemption and is prescribed by the tax law in advance by Hong Kong side to prevent double taxation between Hong Kong and countries other than Hong Kong.


      Specific criteria

      Because it is tax exempt if it is recognized as offshore income, it is important to clearly classify onshore income and offshore income. Currently, DIPN No. 21, which is a judgment standard based on past judicial precedents as a notification base of the tax authorities, has been announced.


      Specific criteria for judgment by industry are as follows.





      Declaration method

      You must submit an offshore application form upon tax return. Since offshore will be tax exempted, a questionnaire will surely arrive after tax authorities accept it. Therefore, after offshore application, it is necessary to preserve records related to offshore income in preparation for tax investigation.


      [Capital / gain exempt tax]

      Transfer income arising from capital transactions is not subject to taxation among the transfer proceeds resulting from the transfer of tangible fixed assets in Hong Kong or the purchase and sale of investment securities. Whether or not it falls under capital transactions is that the assignment of assets is not carried out as part of the project. Specific criteria for judgment are as follows.


      · The acquisition of assets is not aimed at acquiring gains on transfer

      · Resale of assets is not aimed at acquiring gains on transfer

      · It is not a short period from acquisition to transfer

      · The same type of transaction is not frequently done

      · Do not advertise for the transfer of fixed assets

      · Being an assignment for urgent financing


      Tax calculation

      [tax rate]

      Currently, within Hong Kong the corporate income tax rate has been 16.5% since 2008.



    • Declaration and Payment Procedures


      Declaration deadline


      [In the first year of establishment]

      The declaration deadline is within three months from the issue date of the tax notice. The tax notice in which the tax payment amount is written will be issued approximately 12 to 15 months after the establishment date.


      [Case after the second year]

      In principle, it will be within one month from the issue date of the tax notice. Usually, the tax notice in which the amount of tax payment is written will be issued on April 1, so the declaration deadline will be April 30 every year.

      However, if you are appointed a tax agent, you can extend it to the following deadline on condition that you apply for extension from the tax agent.




      Declaration Procedure

      There are (first year) and final return (first year onward) in the declaration. For scheduled declarations in the first year, a tax return will be sent from the tax bureau after the establishment of the company. In the schedule declaration, only six months from the date of establishment must be filled in net sales and deemed profit and submitted to the tax office within one month from the shipping date of the declaration.


      Regarding final tax returns for each fiscal year, we will file a final return form with the audit certificate with tax statement.


      Payment Procedures

      Based on the declaration submitted, the tax bureau will send tax payment notice to the taxpayer describing the fixed tax amount for the business year and the planned tax payment for the following fiscal year. In general, issuance of a tax notice is three to six months after filing a declaration.

      The taxpayer will pay the difference between the planned tax payment in the previous fiscal year and the fixed tax amount for the current fiscal year and the planned tax payment for the next fiscal year by the payment deadline stated in the tax notice.

      Regular tax payment for the next fiscal year is normally divided into two payments. The first payment will pay 75% of the planned tax payment one to two months after the date the tax notice is issued, the remaining amount will be paid 3 months after the first payment.

    • Other tax on Hong Kong


      Asset Income Tax

      Asset Income Tax is tax imposed on real estate leasing income with Hong Kong origin.


      Specific calculation formulas are as follows.


      Rental income = rental income - property tax - (rental income × 80%) asset income tax amount = lease income × 15%

      The tax rate, taxable year, declaration method etc are almost the same as salary income tax.


      Business registration tax

      In order to do business in Hong Kong, it is obliged to obtain a commercial registration certificate from the tax bureau within one month from the business start date. Commercial registration certificates need updating, you can choose 1 year renewal and 3 year renewal. If you choose 3 year renewal, the annual amount of business registration tax will be lower than 1 year renewal.






      Stamp Duty

      In Hong Kong, the stamp duty tax is a precious source of tax revenue and accounts for the proportion following the corporate income tax.

      The targets of stamp duty are limited and are mainly for real estate sales contracts, real estate lease contracts and Hong Kong corporate stock purchase and sale contracts.


      [Real Estate Sale Contract]

      The stamp duty rate for Hong Kong real estate sales contract is as follows.




      [Real Estate Lease Contract]


      The stamp duty tax rate for the real estate lease contracts varies according to the contract term of the lease here is the requirements that needed:




      [Contract for sale and purchase of Hong Kong corporate stock]

      The tax amount of the stamp duty on the sales contract of Hong Kong corporation stock is calculated as follows.




      Property tax

      Property tax is an indirect tax to valuation of real estate. The real estate appraisal value will be reviewed once a year. We will pay taxes on a quarterly advance basis in accordance with the taxation authority's assessment decision notice.

      The tax rate will be 5% of the rental market valuation price based on the assessment by the government authorities.


      Revenue from transfer

      Transfer proceeds (capital gains) are not taxable in Hong Kong. Therefore, residents of Japan will not be taxed on transferred earnings in Hong Kong.

      Regulations for Hong Kong residents are stipulated in the Hong Kong Tax Agreement in Japan. Transfer of real estate, assignment of real estate Taxation on the transfer profits of the shares of failed financial institutions, such as the transfer of similar stocks and equity interests, ships and aircraft operated in international transport, etc. are stipulated.


      Transfer of real estate proceeds in the transfer of similar stocks and equity where it is subject to taxation in Japan where the real estate is located. In other words, if 50% or more of the asset value is directly or indirectly constituted by real estate and the shares of the corporation, the shares of the cooperatives, or the shares of the trust property are transferred, the taxation at the real estate location (Japan) .


      Provided, however, that if the same type of shares as the transferred shares, the same type of shares owned by one resident (Hong Kong resident) and its special interested parties is less than 5%, it will not be taxed.

      In addition, there are vehicle registration tax, excise tax, gaming tax, etc. The following table summarizes Hong Kong taxes.



    • Hong Kong Tax Survey

        Outline of tax investigation

      Tax survey will be conducted by Hong Kong Taxation Bureau however, at Hong Kong Taxation Bureau, there are many cases that the inspector doesn’t visit the taxpayers and investigates related materials or on the spot visits.

      In Hong Kong, all companies are obliged to audit the certified public accountants. With this, the possibility of processing the documents is extremely low. Therefore, the Hong Kong Taxation Bureau will investigate the tax return and attached document submitted by taxpayers on a desk and check whether there are any questions.


      The Taxation Bureau will send written inquiries to taxpayers and tax agents and questions were raised to the survey by the desk. In the questionnaire, usually one month's response will be given a grace, and written responses and supplementary materials will be required to be submitted. Based on these answers, the tax bureau will finalize the assessed income.


    • Tax treaty

        Outline of the Hong Kong Tax Agreement in Japan

      In November 2010, between Hong Kong Special Administrative Region of Japan and China, there’s "An agreement between the Government of Japan and the Government of the People's Republic of Hong Kong SAR for the prevention of double taxation on taxes on income and prevention of tax evasion "The Hong Kong Tax Agreement in Japan has been concluded.

      Taxes subject to the agreement are "taxes on income" imposed for the government, local government or local public entity. In Hong Kong, corporate income tax, salary income tax, asset income tax, in Japan, income tax, corporate income tax, residents Tax is subject to the agreement.

      Until then, there was no such agreement between Japan and Hong Kong, and this tax agreement clarified the bilateral tax relations and clarified the tax risk on investment.

      In addition, withholding tax is reduced by tax agreement and Japanese companies will be more likely to do business in Hong Kong, and it is expected that the investment environment between Japan and Hong Kong will become increasingly more competitive in the future.


      Withholding tax rate

      With the purpose of promoting investment, Japan Hong Kong Tax Agreement reduces the withholding tax rate for investment income (dividends, interest, royalties). In addition to taxation at the place of residence, tax is also imposed on the source of income and limits the withholding tax rate instead of distributing tax between the two countries.

      However, in order to receive the application of the withholding tax rate under the agreement, the recipient of the investment income must be a resident of either country.



      As can be seen from the above, there is no agreement on the investment income that Japanese investors receive from Hong Kong, as the limit tax rate of the agreement exceeds the Hong Kong tax rate. In Hong Kong, there is no withholding system for dividends and interests. On the other hand, the usage fee is 30% of the gain tax of 16.5%, or 4.95%, which is less than the 5% set by the limit tax rate, so the effective tax rate of 4.95% will be applied.

    • Foreign tax credit

       Foreign tax credit is the purpose of preventing double taxation by deducting the tax amount in your country from the tax collected in a foreign country.

      In Hong Kong, there are few cases where foreign tax deductions are received because offshore income is not taxed.

      However, double taxation incurred between the signing countries of the Tax Agreement will be subject to foreign tax credits.

    • Transfer price tax system



      The transfer of pricing tax system is a tax system established for the purpose of regulating the transfer of income to other countries, just like the tax measures system.

      In December 2009 guidelines on transfer pricing were promulgated. The transfer of pricing taxation in Hong Kong follows the OECD's transfer pricing guidelines and the price of transactions with overseas affiliates is unduly low compared to the price used for regular third party or intercompany transactions or if it is a high price, when the amount of profits declines, we will add tax on this reduced amount as accredited profit.



      Regulations on transfer pricing taxation in Hong Kong are stipulated by DIPN 46 and 48, which are notices of its interpretation by the Internal Revenue Service (IRD: Inl and Revenue Department).


      Documentation system

      Creation of a transfer pricing document is not mandated by the Internal Revenue Service however, when declaring corporate income tax, it is mandatory to prepare and save the transaction document.

      At the time of tax investigation, it is recommended to prepare and preserve detailed records of related transactions as books documents necessary for tax investigation in order to explain and verify the rationality such as transaction price and profit and loss concerning transactions corresponding to transfer pricing It is.

      As documents required for tax investigation, DIPN 46 issues the following four items.


      · Clarification of the nature, condition, price, quantity of related transactions with related persons

      · How to set transaction price and conditions including selection of comparison target

      · Market information, verification by comparative object analysis with third parties

      · Comparable intercompany information (business contracts, sales contracts and money borrowing contracts etc.)


      Prior confirmation system

      The Internal Revenue Service announces DIPN No. 48 on March 29, 2012 and it will officially start the advance confirmation system (APA: Advance Pricing Arrangement) from April 2, 2012.

      APA is aimed at confirming in advance whether the transaction price with overseas affiliates is the same as the price used between independent companies and to avoid the risk of transfer pricing taxation.

      The IRD has the authority to conclude an APA with a different country or region based on the provision of Mutual Agreement Procedure (MAP) with Hong Kong and the Double Taxation Prevention Agreement. Therefore, in order to apply APA, it is necessary to be a transaction between Hong Kong's corporate income tax payment obligor and those located in a country having a tax agreement with Hong Kong and the MAP clause Yes.

      In addition, according to DIPN No. 48, the minimum amount of APA application according to the nature of related party transaction is set as follows.



    • Tax · Haven countermeasure tax system

       For the purpose of reducing the tax burden of their company, companies in various industrialized countries intend to record profits in low tax rate countries. One of those low tax rates is from Hong Kong. From the point of view of the company, it can be said that reducing taxes to pay is natural because it increases profits by that amount.

      However, when thinking about the country, using a low tax rate country, the tax revenue will be reduced, and eventually becoming a burden of another tax. Most industrialized countries have established a system called a tax and anti-emergency tax system to curb such unfair tax evasion by companies. Since we are assuming for Japanese companies this time, we will explain the Japanese tax-haven countermeasure tax system here.



      First, a foreign corporation where Japanese corporations or Japanese residents dominate by more than 50% is defined as a foreign affiliated company. This includes not only direct ownership but also indirect ownership.

      Affiliated companies located in countries with a corporate income tax of 25% or less (20% from the fiscal year commencing on or after April 2010) of this foreign affiliated company are defined as specified foreign subsidiaries. As Hong Kong's corporate income tax is 16.5%, it falls under a specified foreign subsidiary company.

      A Japanese corporation or a Japanese resident who is directly or indirectly holding at least 5% of the shares of this specified foreign subsidiary company (10% from the fiscal year commencing on or after April 2010) will be the tax payment obligor.


      Combined taxation

      Those falling under taxpayers must file income of specified foreign subsidiaries etc. together in Japan as well. I will explain it using an example.


      [Calculation example]

      The Hong Kong corporation of the A company group is a wholly owned subsidiary of the Japanese subsidiary, and the profit for this term is 1,000 HK dollars.

      Please be aware that personnel expenses, etc. will be overlooked, all profits will be retained and no dividends will be made.




      When the combined taxation is carried out as above, the group as a whole will be same as paying tax at a tax rate of Japan's corporate income tax (the tax payment place is 165 HK dollars in Hong Kong and 235 HK dollars in Japan).


      Exclusion requirement

      Among specified foreign subsidiaries, etc., those that meet the following requirements are stipulated as having a legitimate economic rationality, and there is a provision that exempts tax haven taxation system.


      [Entity Criteria]

      Hold or lease fixed facilities such as business establishments, shops, factories etc. are necessary for doing business within Hong Kong.


      Therefore, the paper company is not excluded but it is necessary that the number of employees (minimum one full-time staff) necessary for doing business is hired or resident.


      [Control and Control Standards]

      The Hong Kong subsidiary carries out the management, control and management of the project, Hong Kong subsidiary company himself in Hong Kong (head office location).

      Specifically, within Hong Kong, "that executive officers (full-time) are executing their duties", "general meeting of shareholders, holding of board of directors", "preparing and keeping books of accounts" Etc., taking into consideration, we judge comprehensively.


      [Unrelated Personnel Criteria · Country Criteria of Country of Region]

      Depending on the main business content of the Hong Kong subsidiary, one of the following charts will apply.






      [Business Criteria]

      Please avoid making an ownership of stocks or credits, provision of industrial property rights or copyrights, etc., and lending of vessels or aircraft as the main business.
    • References

      [1] JETRO "Hong Kong - tax system"

      [2] Hong Kong Post

      [3] NAC Global.NET

      [4] PWC "International Tax News - China · Hong Kong"

      [5] Kang Gang Accountant Office "Hong Kong Taxation - Corporate Tax"

      [6] Inland Revenue Department 'Business Registration Fee and Levy Table'

      [7] Mitsubishi Tokyo UFJ Bank International Business Division Overseas Business Support Office "Transfer Pricing Tax System and Hong Kong Tax Agreement in Hong Kong" CHINAWEEKLY, 14th April 2010

      [8] JETRO Hong Kong Office "Institution Information on Advancement in Hong Kong" March 2012

      [9] Inland Revenue Department Hong Kong Departmental Interpretation And Practice Notes No. 46 'Transfer Pricing Guidelines - Methodologies and Related Issues'

      [10] KPMG "Tax Alert" February 2012 2nd

      [11] Towatsu ed. "Tax law of Asian countries <7th edition>" Chuo Keizai Shimbun, 2011

      [12] Complete Guide to Hong Kong and Macao Advancement edited by NAC International Accounting Group Canary Bookstore, 2010