Tax Arrangement--- With Legal Evidence and Tax Free

Hong Kong is a super international place both in commerce and finance , extremely free for business operation in the world , the taxation in Hong Kong is extremely simple for corporation or Limited Company , generally , only the profit tax is imposed on the Hong Kong Companies by the Hong Kong Inland Revenue Department , the rate of profit tax is around %15 to %17 ,the allowance and accepted administrative expenses are widest in the world , to simply , Hong Kong Inland Revenue Department only imposes the profit tax on the sources of income from Hong Kong , all cost in the production of profit could be deducted in the company’s operation , that means , any activities could be proved that the activities are not in Hong Kong , the company must claim the offshore profit from the Hong Kong Inland Revenue Department in the audit report , if successful , a lot of offshore activities profit could be exempted from the profit tax in Hong Kong . To conclude , Hong Kong Corporation and Limited Company must entitle the lowest profit tax rate in the world or exempted offshore activities profit tax . It is best for tax arrangement and running business in Hong Kong .

BVI Company is one of tool for many businessman for international trade , however , so many IBC act in BVI was forced to amend such as confidentiality and bear share right , the merits of BVI is losing gradually , apart from that Hong Kong is a super financial center , no foreign exchange control is imposed by the Hong Kong Government ,you can find almost all famous bank in Hong Kong . Hong Kong is a best place for any investor and trader .

What is “ offshore profit ” ?

Hong Kong Government only has the right to impose the profit tax on anyone such as professional or companies to get the tax from the income of Hong Kong sources , according to practice guide from Inland Revenue Department , there are a lot of important points for consideration about the activities whether is onshore or offshore , for example , if you are an international trader , your product is purchased in China , and then sold to an importer of Taiwan , what are the main considerations ? including but not limited to ;

a) How to find the supplier in China ? The main purpose of this     question is to investigate your company whether the main     operations is/are in Hong Kong , however , if your supplier is     found in the exhibition in Hong Kong , it is a negative factor     to conclude that the operation is out of Hong Kong , if you     arrange a person from Canada to Taiwan to find the     supplier for contact and negotiation , it is a strong point for     you to conclude that your case is offshore , it is a positive     factor
b) How to find the client in Taiwan ? It is similar to question a , if     your client is contacted from Hong Kong office with Taiwan     Office , and negotiation is in Hong Kong , it is a negative     factor , however , if you arrange a person from Singapore to     Taiwan to get the contract , all negotiation is in Taiwan , it is     a positive factor .
c) How to ship the products from China to Taiwan ? If your     product is shipped directly from China to Taiwan or from     China to Hong Kong to Taiwan without additional work to the     product , it is related to the law of incremental value , it is a     positive factor , however , if your product is shipped from     China to Hong Kong for package , it increase the value of     product in Hong Kong , and then to Taiwan , it is a negative     factor .
d) Where to sign the contract ? If your contract is arranged to     sign in Hong Kong , it is a negative factor . If your contract is     signed in Taiwan or Canada , it is a positive factor .
e) How to get the payment ? It is not an important factor , since     Hong Kong Government highly recommend anyone to use     our financial service for transaction , special in the     international trade arrangement .

Inland Revenue Department must consider the above relevant points to decide the operation whether is in Hong Kong or not , and the sources of income whether is in Hong Kong or not , lastly , to classify the profit whether is onshore or offshore .