Business Registration and Tax

Closed Thread
  1. #1

    Business Registration and Tax

    Hi,

    Here's the situation...a company (Company A) is incorporated in US and UK but in HK it is registered under the Business Registration only (but not the Company Registry) as part of another HK-incorporated company - Company B (i.e., with both business registration and cmopany registration). Company B employs local employee(s) but in the contract it clearly states that the employees work for Company A, which is an internal division of Company B. The employment contracts are signed in Hong Kong.

    All sales contracts go either to the US or UK office, but the employee(s) signing it is/are those HK employees of Company A.

    I strongly believe that Company A should be filing and paying profit tax to Hong Kong government (and US/ UK governments) because part of the revenue is driven out of Hong Kong. So Either Company A has to file profit tax or Company B has to do this on Company A's behalf.

    But someone told me that because all sales contract officially through through US/ UK, then Company A only needs to pay US/ UK taxes, but not HK taxes...

    All employees in Company A are now paying MPF and HK employee income tax.

    Am I right or is the other person right?

    I just think that Company A is being short-sighted and one day, sooner or later, it will get into trouble with the Inland Revenue Department of HK...


  2. #2

    Join Date
    Jun 2005
    Location
    Hong Kong
    Posts
    23,205

    Start here: http://www.ird.gov.hk/eng/pdf/e_faqciohk.pdf

    On a quick read I think you are right.


  3. #3

    Thanks...I do have a strong sense that I am right...especially given the sales contracts are signed by local-employed HK employees...


  4. #4

    Join Date
    Jan 2008
    Posts
    1,966

    Tax

    Is the company B getting any compensation for providing the services to the Company A?


  5. #5

    No, I don't think so. Does it matter? Company B is NOT a shell company though as it's a HK branch of another huge MNC - under related but different businesses...so it's more like a "gratitious" / helpful arranegment...