In Hong Kong, the principle of territoriality is crucial to the taxation of profits tax. This means that only profits that are sourced in or derived from Hong Kong are subject to profits tax in Hong Kong. In some cases, profits earned by a Hong Kong company may be considered offshore sourced and not subject to taxation in Hong Kong. Here are some examples of such cases:

 

Trading activities conducted outside of Hong Kong: If a Hong Kong company carries out its trading activities outside of Hong Kong, the profits derived from those activities may be treated as offshore sourced and not subject to profits tax in Hong Kong.

 

Services provided outside of Hong Kong: If a Hong Kong company provides services outside of Hong Kong, the profits derived from those services may be considered offshore sourced and not subject to profits tax in Hong Kong.

 

Investment income derived from outside of Hong Kong: If a Hong Kong company earns investment income from sources outside of Hong Kong, such as dividends or interest from overseas investments, those profits may be treated as offshore sourced and not subject to profits tax in Hong Kong.

 

Profits from the sale of assets located outside of Hong Kong: If a Hong Kong company sells assets located outside of Hong Kong, the profits derived from that sale may be considered offshore sourced and not subject to profits tax in Hong Kong.

 

 

It is important to note that each case will be evaluated on its own merits, and it is recommended to seek the advice of a professional tax advisor to determine the tax implications for specific situations..

Tax Planning for Trading Profits

Tax Planning for Manufacturing Profits

Tax Planning for Servicing Profits

Tax Planning for E-Commence Profits

Tax Planning for Other Profits