In recent days, the economies of China and Hong Kong have been sluggish and lack vitality. But last week, our company suddenly received good news: a customer who applied for offshore tax exemption, after five years of negotiations with the tax bureau, finally obtained the approval of the tax bureau to completely exempt Hong Kong profits tax and completely refund the previous prepaid tax approximately more than 10 million dollars. In other words, our company earned more than 10 million dollars for this client this year.
According to the practice of the Hong Kong Inland Revenue Department, they will not admit the "you win, I lose" outcome. They only say that there is no need to modify the tax assessment for the original year, which means that they agree with the tax filer's original method of filing the tax return.
In this case, our client from China who set up a Hong Kong company to run mass merchandise. According to tax regulations, the business is not operated in Hong Kong, so the application does not need to pay Hong Kong profits tax. But of course the tax bureau is not so easy to give in. It insists that the company must pay Hong Kong profits tax and raises many reasonable or even unreasonable questions, asking the customer to explain. After five years, our company answered the questions raised by the tax bureau one by one, and finally succeeded.
This case illustrates that as long as you make a good tax plan and then implement it effectively, you can effectively reduce taxes.
Our company has many years of experience in handling tax work and has successfully applied for exemption or reduction of Hong Kong profits tax for many clients. If you have any tax issues, please feel free to contact us.
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