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Offshore Tax Claim

25 February, 2016

Offshore companies can apply for offshore tax exemption when submitting the first tax return. If your Hong Kong company has a profit, Inland Revenue Department will issue a tax queries letter asking for the operation mode of the business of the company, full sets of documents such as sales & purchase invoices with shipping documents/ service fee invoices, bank receipts and payments copies and all relevant agreements, emails and fax correspondence for representative transactions as well as copies of passports of directors/sales representative/ business operators.

It's one-off tax queries, once IRD approves the offshore status, the company's profits will not be subjected to HK profits tax for more than 5 years, the only thing needed to be done is to file the regular Profit Tax Return and audited report annually. 

Inland Revenue Department may not approve the offshore status if the company fail to answer the tax queries and don't provide sufficient documents. In that case, the company would be required to pay HK profit tax of 16.5% on assessable profits for each year.  

The audited report must be submitted to IRD as an original and signed by an auditor along with the PTR.  PTR should be originally signed by secretary/manager/director.

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