Hong Kong tax newsletters
Mazars’ comments on Hong Kong tax issues.
March 2021 - The OECD’s updated position on permanent establishment and residency due to COVID-19 pandemic
The COVID-19 pandemic has lasted for over one year now. The Organisation for Economic Co-operation and Development (“OECD”) has been following the pandemic closely, issuing guidance on the temporary change of work location because of travel restriction giving rise to the creation of permanent establishment (“PE”) or change in residence status of corporations, and guidance on transfer pricing.
February 2021 - OECD Guidance on transfer pricing implications of COVID-19
On 18 December 2020, the OECD published Guidance on the transfer pricing implications of the COVID-19 pandemic (“OECD Guidance”) providing guidance to taxpayers when applying the arm’s length principle and applying the OECD 2017 Transfer Pricing Guidelines (“TPG”) for periods impacted by the COVID-19 pandemic.
January 2021 - Changes are around the corner: the BEPS 2.0 Pillar 1 update
In October 2019, the OECD released proposals for a new unified approach to taxation of multinational enterprises in the digital environment, the so-called Pillar 1 of the BEPS 2.0 project. In November 2019, the OECD also released the Global Anti-base Erosion (GloBE) proposal, the so-called Pillar 2 of the BEPS 2.0 project. On 12 October 2020, the G20/OECD Inclusive Framework on BEPS (“Inclusive Framework”) released two detailed “blueprints” in relation to its ongoing work to address the tax challenges arising from the digitalization of the economy (“Pillar 1”) and in relation to the tax rules designed to ensure that large multinational businesses pay a minimum level of tax on all profits in all jurisdictions (“Pillar 2”).
The OECD’s aim is to bring the process to a conclusion by mid-2021.
This tax newsletter comments on the Pillar 1 initiation, and we would comment on the Pillar 2 in a separate tax newsletter.
For more information, please download our newsletter to read more.
The OECD’s aim is to bring the process to a conclusion by mid-2021.
This tax newsletter comments on the Pillar 1 initiation, and we would comment on the Pillar 2 in a separate tax newsletter.
For more information, please download our newsletter to read more.
December 2020 - E-form with information on TP documentation
The Transfer Pricing (“TP”) regime and the related TP documentation requirements were introduced into the Hong Kong tax legislation in July, 2018. The requirement for the preparation of Master File and Local File, if the company meets the threshold, applies for an accounting period on or after 1 April, 2018, with the due date being 9 months after the relevant accounting year-end. For example, for companies with a December 31 year-end, the first due date of preparation of the Master File and Local File is 31 September, 2020.
Recently, the Inland Revenue Department (“IRD”) has started to conduct a compliance review on taxpayers’ TP documentation preparation, and required specific taxpayers to fill in and submit an electronic form (“e-form”) with information on Master File and Local File (“Form IR1475”).
Download our Hong Kong tax newsletter to learn more.
Recently, the Inland Revenue Department (“IRD”) has started to conduct a compliance review on taxpayers’ TP documentation preparation, and required specific taxpayers to fill in and submit an electronic form (“e-form”) with information on Master File and Local File (“Form IR1475”).
Download our Hong Kong tax newsletter to learn more.
November 2020 - Abolition of the Doubled Stamp Duty (DSD) on non-residential property
The Government considers now the right time to abolish the Doubled Stamp Duty (DSD) imposed on non-residential properties.
October 2020 - Final OECD transfer pricing guidelines on financial transactions (part II: treasury functions)
The Organization for Economic Co-operation and Development (OECD) has released in February 2020 the final Transfer Pricing Guidance on Financial Transactions (“Guidance”). The Guidance provides an insight on the arm’s length treatment of various financial transactions among related parties.
September 2020 - Final OECD transfer pricing guidelines on financial transactions (part I: intra-group loans)
The Organization for Economic Co-operation and Development (OECD) has released in February 2020 the final Transfer Pricing Guidance on Financial Transactions (“Guidance”). The Guidance provides an insight on the arm’s length treatment of various financial transactions among related parties.
June 2020 - Revised DIPN 39 on digital economy, electronic commerce and digital assets
April 2020-Transfer pricing in the wake of COVID-19 and the recent China-US trade dispute
Multinational enterprises (MNEs) which source their products manufactured in China or sell to the China market will be adversely affected by the coronavirus disease 2019 (COVID-19) and the recent China-US Trade Dispute during 2019. In addition to a declining global economy because of the above un-fortunate factors, these MNEs will face disruptions to their supply chains and challenges of moving personnel cross borders, which will likely lead to an erosion of profit margins.
April 2020 - Hong Kong issued advance ruling on interpretation of permanent establishment
In February 2020, the Hong Kong Inland Revenue Department (“IRD”) published an advance ruling case on interpretation of Permanent Establishment (“PE”) in Hong Kong.
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