visa required to work from home for American company?

[towelrod]

I'm moving to HK with my wife, who will be working in HK with a work visa. I can get a dependent visa through her. I would like to continue working for my American company from HK -- I currently work from home in the US, and I would like to continue working from home in HK. I am a regular employee of a US based corporation, not a contractor.

Does anyone know if I have to get a work visa for that?

[PDLM]

A Dependant Visa (dependant on anyone except someone on a study visa) gives you the right to work freely without further paperwork, so you'll be fine with what you have.

I believe you would, in principle, be liable for HK Salaries or Profit tax since you would either be employed in Hong Kong or running a business here. ("Employed in" means HK is the place where you habitually undertake the work - where your employer is, or where your contract is signed is irrelevant.).

There is, of course, a question about how the HK Revenue would know since your employer would not make a return to them. Only you can decide whether you wish to act illegally by not declaring your salary to Inland Revenue.

[kostas]

Here is what I got from an email exchange I had with IRD some time ago:

The Hong Kong tax system is based on the territorial concept not on residential basis. Salaries Tax is imposed on all income arising in or derived from Hong Kong from an employment.

According to the Inland Departmental Interpretation and Practice Note No. 10, an employment is regarded outside Hong Kong if all of the following three conditions are satisfied.

1. The employment contract is negotiated, concluded and enforceable outside Hong Kong.
2. The employer is resident outside Hong Kong
3. The remuneration is paid outside Hong Kong.

However, if any one condition has not been fulfilled, then the employment is regarded as in Hong Kong. The consequence of a Hong Kong employment is that all the income from the employment is taxable in Hong Kong even though the employee performs most of the services outside Hong Kong.

If it is a non Hong Kong employment contract, then only income derived from services rendered in Hong Kong is chargeable with Hong Kong salaries tax under Section 8(1A) of the Inland Revenue Ordinance. This is usually determined by the number of days the employee stayed in Hong Kong during the basis period of each year of assessment. This is referred as "Time Basis".

Hope it helps

[krypton]

The last para is of utmost importance. Assuming you can prove your employment is a non HK employment you will still need to pay tax if you were residing in HK during that time.

[towelrod]

Thanks for all the info!

[CPA4U]

Also, you may apply a credit against your US taxes for the Hong Kong taxes you pay. Overall tax effect could be minimal. Please consult with your tax advisor.