Tax exemption status

June 15, 2016

Would you like to get the tax exemption status for your Hong Kong Limited company? Read our article to understand the process.

Two months before the 2nd anniversary of the company, the company secretary will receive the PTR (Profits Tax Return).

If the company has commenced offshore business only (all income is earned out of Hong Kong).

The PTR still needs to be filed, the company must also submit audited financial statements and Tax computation.

In the tax computation, we will mention that the company did not carry on any trade, profession or business in Hong Kong nor did it generate any profits arising in or derived from Hong Kong.

IRD (Inland Revenue Department) will then issue an offshore claim queries letter for the proof by providing the passport of the directors/ sales representatives and some samples of sales and purchase/service fee invoices, contracts/agreements and shipping documents e.g. bill of lading. The IRD will give a deadline to answer the tax quarries. The company can ask for extension for the deadline if it cannot meet the original deadline. Furthermore, IRD will usually issue assessment based on tax payer’s calculation first without any investigation. And they will investigate later.

So that the query letter may be issued one year or years later after submission of tax computation.

Tax exemption status

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