SME Corporate Tax question

[cookie09]

http://www.ird.gov.hk/eng/tax/bus_pft.htm#a03

do I read this correctly?

- I own Company A
- Company A owns Company B
- Company B pays taxes on its profits and distributes the remaining profits to its shareholder, Company A
- Company A then pays no taxes (assuming it doesn't have any other business), right?

(in reality Company A has its own business, but i am really trying to confirm that Company A doesn't pay any profits tax on the profits/dividends from Company B)

[iliketurtles]

Yes cookie - assuming both are HK companies, dividends are not taxable in HK.

[cookie09]

thanks, kind of makes sense but just wasn't sure

[Danny TK Chan]

in view of accounting standard, company A will only be considered as a holding company and has no obligation to pay profit tax in Hong Kong as long as company B is already paying for its profits.