Hong Kong Tax Review 2016 - PwC · 2015 issue of Hong Kong Tax Review.1 The fourth protocol...

wwwpwchkcom

Hong Kong Tax Review 2016

1Hong Kong Tax Review 2016

Hong Kong 2016 year in reviewDuring year 2016 the Hong Kong Special Administrative Region (HKSAR) Government took a number of tax initiatives to strengthen the role of Hong Kong as an international financial centre and encourage businesses to use Hong Kong as their regional intellectual property (IP) hub These initiatives are (i) enacting a concessionary tax regime for qualifying corporate treasury centres (QCTCs) in Hong Kong (ii) introducing the open-ended fund company (OFC) as an alternative investment fund vehicle for funds domiciled in Hong Kong (iii) examining the use of tax concession to boost the aircraft leasing business and explore business opportunities in aerospace financing and (iv) proposing a tax deduction for capital expenditure incurred on the purchase of three more types of intellectual property rights (IPRs)

The legislation relating to items (i) and (ii) above was enacted this year whereas the draft tax laws on items (iii) and (iv) are expected to be gazetted within next year All in all these tax measures should put Hong Kong in a more competitive position as an international financing centre a premier regional asset management centre and an IP trading hub

Also with the official launch of the Shenzhen-Hong Kong Stock Connect on 5 December 2016 Hong Kongrsquos strategic role as a platform for international investors to access the China capital market and Mainland investors to go aboard has also been strengthened

The Organisation for Economic Cooperation and Development (OECD)rsquos Base Erosion and Profit Shifting (BEPS) project has entered into the local implementation stage Hong Kong like many other jurisdictions has kicked off the potentially long and ongoing journey of implementing the BEPS measures The HKSAR Government issued a consultation paper on implementing measures to counter BEPS in October 2016 The consultation paper set out the HKSAR Governmentrsquos policy intent and priorities for Hong Kong for implementing the BEPS package In particular the proposed introduction of a transfer pricing (TP) regime and TP documentation requirements (including country-by-country (CbC) reporting) in Hong Kong will significantly reshape the TP landscape in Hong Kong in the coming years

Tax transparency and automatic exchange of financial account information in tax matters (AEOI) are also on top of the international tax agenda in 2016 To fulfil its commitment to implement AEOI by 2018 Hong Kong enacted the AEOI legislation in June 2016 and subsequently signed bilateral competent authority agreements (CAAs) on AEOI with Japan and the United Kingdom (UK) in October 2016

This review recaps the major tax developments that took place in 2016 The details of which have been covered in our various Hong Kong Tax News Flashes Financial Services Tax News Flashes and International Assignment Services ndash Hong Kong Publications issued during the year (see pages 14-15)

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Developments in Hong Kong tax treaties

As of December 2016 Hong Kong has entered into 35 comprehensive double tax arrangement agreements (CDTAs) Out of these 35 CDTAs 32 are effective in Hong Kong as of year of assessment 201617 (including the Hong Kong-Romania CDTA which became effective on 1 January 2017) two will be effective from year of assessment 201718 and the remaining one is in the process of being ratified

Update on CDTAs in 2016

During 2016 Hong Kong signed a CDTA with Latvia and Russia respectively The CDTA with Russia was ratified in July 2016 and will take effect in Hong Kong from 1 April 2017 whereas the CDTA with Latvia has yet to come into force pending completion of the ratification procedures In addition the CDTA signed with Korea in 2014 was ratified in September 2016 and will take effect in Hong Kong from 1 April 2017

As far as the Hong Kong-Mainland CDTA is concerned we discussed the fourth protocol to the CDTA that was signed in April 2015 in the December 2015 issue of Hong Kong Tax Review1

The fourth protocol subsequently entered into force on 29 December 2015 The State Administration of Taxation of China (SAT) then issued an interpretation on the fourth protocol on 16 March 2016 The SATrsquos interpretation clarifies that for the purpose of enjoying a tax exemption in the Mainland for gains derived by Hong Kong tax residents from disposal of shares of Chinese resident enterprises that are listed on recognised stock exchanges the requirement of ldquoacquiring and disposing of the shares at the same stock exchangerdquo specified in the fourth protocol means that the buyer and the seller as well as the quantity and price of the shares transferred are not

agreed between the buyer and the seller in advance but are determined by the general transaction rules of an open stock market Please refer to our Hong Kong Tax News Flash April 2015 Issue 4 for a detailed discussion of the fourth protocol

The fourth protocol clarifies certain tax issues related to cross-border share transactions arising from the Shanghai-Hong Kong Stock Connect which commenced in November 2014 Please refer to our Hong Kong Tax News Flash June 2014 Issue 6 for more details of the programme The fourth protocol also gave momentum to the official launch of the Shenzhen-Hong Kong Stock Connect on 5 December 2016 For a discussion of the China and Hong Kong tax considerations for investors participating in the programme please refer to our Hong Kong Financial Services Tax News Flash December 2016

In addition the Mainland and Hong Kong exchanged notes on the Hong Kong-Mainland CDTA on 16 March 2016 and 15 April 2016 respectively to extend the valid period of a Hong Kong Certificate of Residence (CoR) under the CDTA to three years Effective 15 April 2016 a CoR issued by the Inland Revenue Department (IRD) under the Hong Kong-Mainland CDTA for a calendar year can serve as a proof of Hong Kong resident status for that calendar year and the two succeeding calendar years The CoR application forms for use under the Hong Kong-Mainland CDTA have also been revised to reflect this latest administrative arrangement Please refer to our Hong Kong Tax News Flash June 2016 Issue 6 for a detailed discussion on this development

1 Please refer to the Hong Kong Tax Review 2015 in this link httpwwwpwchkcomhomeenghk_tax_review_dec2015html


Implementation of Hong Kong CDTAs

The following table summarises the implementation status of the 35 CDTAs signed by Hong Kong and the tax years from which these CDTAs becamewill become effective in Hong Kong and the corresponding contracting jurisdictions

Jurisdiction Date of signing Date of entry into force

Effective date in Hong Kong (year of assessment)

Effective date in the other contracting jurisdiction

CDTAs signed before 2010

1 Belgium December 2003 October 2004 200405 1 January 2004

2 Thailand September 2005 December 2005 200607 1 January 2006

3 The Mainland August 2006 December 2006 200708 1 January 2007

4 Luxembourg November 2007 January 2009 200809 1 January 2008

5 Vietnam December 2008 August 2009 201011 1 January 2010

CDTAs signed during 2010

6 Brunei March 2010 December 2010 201112 1 January 2011

7 The Netherlands March 2010 October 2011 201213 1 January 2012

8 Indonesia March 2010 March 2012 201314 1 January 2013

9 Hungary May 2010 February 2011 201213 1 January 2012

10 Kuwait May 2010 July 2014 201415 1 April 2014

11 Austria May 2010 January 2011 201213 1 January 2012

12 The UK June 2010 December 2010 201112 1 or 6 April 2011

13 Ireland June 2010 February 2011 201213 1 January 2012

14 Liechtenstein August 2010 July 2011 201213 1 January 2012

15 France October 2010 December 2011 201213 1 January 2012

16 Japan November 2010 August 2011 201213 1 January 2012

17 New Zealand December 2010 November 2011 201213 1 April 2012


18 Portugal March 2011 June 2012 201314 1 January 2013

19 Spain April 2011 April 2012 201314 1 April 2013

20 The Czech Republic June 2011 January 2012 201314 1 January 2013

21 Switzerland October 2011 October 2012 201314 1 January 2013

22 Malta November 2011 July 2012 201314 1 January 2013


23 Jersey February 2012 July 2014 201415 1 January 2014

24 Malaysia April 2012 December 2012 201314 1 January 2013

25 Mexico June 2012 March 2014 201415 1 January 2014

26 Canada November 2012 October 2014 201415 1 January 2014


27 Italy January 2013 August 2015 201617 1 January 2016

28 Guernsey April 2013 December 2013 201415 1 January 2014

29 Qatar May 2013 December 2013 201415 1 January 2014

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Latest status of CDTA negotiations

The table below shows the latest status of CDTA negotiations between Hong Kong and a list of countries with which negotiations have been completed or have taken place in recent years

Countries with which negotiations have taken place in recent years

Mauritius first round completed on 16 January 2013

Bahrain second round completed on 12 December 2013

Israel first round completed on 23 January 2014

Bangladesh second round completed on 1 August 2014

Germany second round completed on 6 March 2015

Saudi Arabia third round completed on 13 May 2015

Macedonia first round completed on 12 June 2015

Pakistan third round completed on 15 October 2015

India third round completed on 23 December 2015

Cyprus first round completed on 30 March 2016

Turkey second round completed on 12 August 2016

Belarus first round completed on 20 October 2016





30 Korea July 2014 September 2016 201718 1 January or 1 April 2017

31 South Africa October 2014 October 2015 201617 1 January 2016

32 United Arab Emirates December 2014 December 2015 201617 1 January 2016

CDTA signed during 2015

33 Romania November 2015 November 2016 1 January 2017 1 January 2017


34 Russia January 2016 July 2016 201718 1 January 2017

35 Latvia April 2016 Pending Pending Pending

The Exchange of Information articles in these two CDTAs are of the 1995 OECD version which is less liberal than the 2004 OECD version


Implementing the BEPS measures in Hong Kong

The HKSAR Government announced on 20 June 2016 that Hong Kong accepted the OECDrsquos invitation to join the OECDrsquos inclusive framework for implementation of the BEPS package as an associate The commitment to the BEPS project was first revealed in April 2016 when the Deputy Commissioner of Inland Revenue commented on the implementation of the BEPS project in Hong Kong in April 2016 Please refer to our Hong Kong Tax News Flash May 2016 Issue 4 for a more detailed discussion on Hong Kongrsquos response to BEPS

By joining the BEPS inclusive framework Hong Kong has committed to the consistent implementation of the BEPS package in particular the four minimum standards under BEPS Actions 5 6 13 and 142 as identified by the OECD

The HKSAR Government then launched a public consultation on implementing measures to counter BEPS in Hong Kong in October 2016 The BEPS consultation paper indicated that Hong Kong will uphold a simple and low tax regime in Hong Kong and focus on the four minimum standards for implementing the BEPS package and measures that are of direct relevance to their implementation

In particular the consultation paper identified the following as the priority areas for Hong Kong

2 The four minimum standards identified by the OECD are (i) spontaneous exchange of information on certain tax rulings (Action 5) (ii) preventing treaty abuse (Action 6) (iii) TP documentation and CbC reporting (Action 13) and (iv) improving cross-border tax dispute resolution (Action 14)

Introducing a TP regulatory regime in Hong Kong

Introducing TP documentation and CbC reporting requirements in Hong Kong

Other related matters namely a statutory mechanism for dealing with mutual agreement procedure and arbitration cases spontaneous exchange of information on certain tax rulings and enhancement to the tax credit system

Implementing the multilateral instrument in Hong Kong and

Adopting anti-treaty abuse rules in CDTAs

The HKSAR Government aims to introduce the amendment bill(s) for implementing the above measures into the Legislative Council in mid-2017 Please refer to our Hong Kong Tax News Flash November 2016 Issue 10 for a more detailed discussion on Hong Kongrsquos BEPS consultation paper

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Key tax and related legislation enacted in 2016

The table below summarises the key legislation enacted in 2016

Legislation Subject matter Date of enactment

1 Inland Revenue (Amendment) Ordinance 2016

bull Implementing certain tax measures proposed in the 201617 Hong Kong Budget

27 May 2016

2 Inland Revenue (Amendment) (No2) Ordinance 2016

bull Providing a concessionary profits tax rate of 825 for certain profits derived by a QCTC

bull Giving effect to the new deduction rules for interest expenses incurred by an intra-group financing business and the new deeming provisions on interest income and certain profits arising through or from such business

bull Clarifying the profits tax and stamp duty treatments in respect of regulatory capital securities (RCSs) issued by financial institutions (FIs)

3 June 2016

3 Securities and Future (Amendment) Ordinance 2016

bull Introducing the legal regulatory and tax framework for an OFC regime in Hong Kong

10 June 2016 (Effective date to be appointed)


bull Introducing a legal framework on AEOI (or the Common Reporting Standard) in Hong Kong

30 June 2016

Tax measures in the 201617 Hong Kong Budget

The Inland Revenue (Amendment) Ordinance 2016 gave effect to the following tax measures proposed in the 201617 Budget

bull A reduction of 75 of profits tax salaries tax and tax under personal assessment for 201516 subject to a ceiling of HK$20000

bull Increase in certain personal allowancesdeduction ceiling for salaries tax purposes

The following measures were also proposed in the 201617 Budget but the related draft tax legislation has not yet been gazetted

bull Expanding the scope of tax deduction for capital expenditure incurred on the purchase of IPRs to cover layout-design of integrated circuits plant varieties and rights in performance

bull Examining the use of tax concessions to boost the aircraft leasing business and explore business opportunities in aerospace financing

3 wwwpwchkcomhomeengbudget2016html

For details of the salaries tax proposals enacted please refer to the section lsquoHong Kong salaries tax developmentsrsquo below As to the details of the other budget proposals please visit our website dedicated to the 201617 Hong Kong Budget3


Tax measures for QCTCs and RCSs in Hong Kong

The Inland Revenue (Amendment) (No2) Ordinance 2016 was gazetted on 3 June 2016 to introduce the following tax measures

bull Providing a concessionary profits tax rate of 825 for the qualifying profits of a QCTC when the prescribed conditions are met

bull Allowing a tax deduction for a corporation carrying on an intra-group financing business in Hong Kong in respect of interest expenses from money borrowed from a non-Hong Kong associated corporation in the ordinary course of that business provided that certain conditions are satisfied

bull Deeming the interest income and profits from sale disposal and redemption etc of certain debt instruments derived by a corporation (other than a FI) arising through or from the carrying on of an intra-group financing business in Hong Kong as taxable trading receipts even if the moneys in respect of which the interest is derived are made available outside Hong Kong or the transaction is effected outside Hong Kong

bull Clarifying the profits tax and stamp duty treatments in respect of RCSs eg (1) treating a RCS as a debt security such that a distribution (other than a repayment of the paid-up amount of the security) in respect of a RCS will be regarded as interest for taxation and deduction purposes and (2) sale or purchase or other transfers of a RCS will not to be regarded as a sale or purchase or transfer of Hong Kong stock and therefore not subject to stamp duty

The 825 tax rate applicable to QCTCs and the new interest expense deduction rules for intra-group financing businesses apply retrospectively from 1 April 2016 whereas the other provisions apply from 3 June 2016 (eg the deeming provisions) or the transitional year of assessment (ie the year of assessment corresponding to the basis period within which the commencement date falls)

Please also refer to the discussion of Departmental Interpretation and Practice Notes No 52 (DIPN 52) on Taxation of Corporate Treasury Activity in the section lsquoGuidance issued by the IRDrsquo below

While the QCTC tax regime puts Hong Kong in a competitive position as a location for multinational corporates to set up or relocate their group treasury functions considerable practical complexities and detailed rules will need to be observed for enjoying the concessionary tax rate

Please refer to our Hong Kong Tax News Flash May 2016 Issue 5 for more details of the new tax regime for QCTCs

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The OFC regime in Hong Kong

The Securities and Futures (Amendment) Ordinance 2016 was gazetted on 10 June 2016 to introduce the legal regulatory and tax framework for an OFC regime in Hong Kong However its effective date has yet to be appointed by the Secretary for Financial Services and the Treasury by a notice to be published in the Gazette

In the past an open-ended investment fund could only be established in Hong Kong in the form of a unit trust When the Ordinance becomes effective it will provide an alternative form of vehicle for investment funds domiciled in Hong Kong This is another step taken by the HKSAR Government to promote Hong Kong as a premier regional asset management centre and fund hub

Please refer to our Hong Kong Financial Services Tax News Flashes January 2016 and June 2016 for a more detailed discussion of the OFC regime in Hong Kong

Implementing AEOI in Hong Kong

The Inland Revenue (Amendment) (No 3) Ordinance 2016 was gazetted on 30 June 2016 The Ordinance puts in place a legal framework for Hong Kong to implement AEOI (or the CRS) and fulfil its commitment on commencing the first information exchange by the end of 2018

To provide further guidance on the implementation of AEOI the IRD has created a designated webpage on AEOI with a detailed operational guidance for FIs and other reference materials4

As of December 2016 the HKSAR Government has signed bilateral CAAs with Japan and the UK with a view to commencing AEOI on a reciprocal basis with these two countries by the end of 2018 The HKSAR Government has also indicated that it will continue to expand Hong Kongrsquos AEOI network and seek to conclude as many CAAs as practicable with Hong Kongrsquos CDTA or TIEA partners within 2017

Reporting FIs are expected to register with the IRD by September 2017 receive the first AEOI returns issued by the IRD in January 2018 and file the AEOI returns to the IRD by May 2018

Please refer to our Hong Kong Tax News Flash July 2016 Issue 7 for our observations of the AEOI regime in Hong Kong and International Assignment Services ndash Hong Kong Publication October 2016 for a discussion of the potential impacts of AEOI on mobile employees and their employers

4 The IRDrsquos webpage on AEOI can be accessed via this link httpwwwirdgovhkengtaxdta_aeoihtm


Other proposal pending legislation

Increase in the ad valorem stamp duty rates on transfer of residential property

On 4 November 2016 the HKSAR Government proposed to increase the ad valorem stamp duty rates on transfer of Hong Kong residential properties from Scale 1 rates (ie 15 to 85) to a flat rate of 15 with effect from 5 November 2016 The current exemptions for applying the Scale 1 rates will continue to apply to the 15 flat rate (eg the 15 rate will not apply to residential property acquired by a Hong Kong permanent resident who does not own any residential property at the time of acquisition) Although the relevant legislation has yet to be enacted the 15 rate will apply retrospectively from 5 November 2016 when the related legislative amendments come into force

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Guidance issued by the IRD

Assessing practice on corporate amalgamations

The new Companies Ordinance which became effective on 3 March 2014 introduced the court-free procedures for amalgamation of wholly owned group companies in Hong Kong To clarify the profits tax treatment of corporate amalgamations the IRD issued guidance on its assessing practice on tax issues arising from corporate amalgamations in late December 2015 The guidance mainly covers the following issues

In particular the guidance indicates that various conditions will need to be met before the tax losses sustained by the amalgamatingamalgamated company before the amalgamation can be utilised to offset against the profits derived by the amalgamated company after the amalgamation The guidance reflects the positions taken by the IRD in the advanced ruling cases published5

While the guidance provides clarification on the profits tax treatment of corporate amalgamation there are still uncertainties on issues such as the application of the conditions for utilising tax losses in practice and the stamp duty treatment The IRD has indicated that specific tax legislation on corporate amalgamation will be introduced in Hong Kong in order to provide greater clarity and certainty

Please refer to our Hong Kong Tax News Flash March 2016 Issue 2 for a more detailed discussion of the guidance and some of the advance ruling cases on corporate amalgamation

Profits tax exemption for offshore private equity funds

Further to the enactment of the Inland Revenue (Amendment) (No 2) Ordinance 2015 which has extended the profits tax exemption for offshore funds to offshore private equity (PE) funds since 1 April 2015 the IRD published the following two DIPNs on 31 May 2016

bull DIPN 51 on Profits Tax Exemption for Offshore Private Equity Funds which set out the IRDrsquos views on various issues arising from the extension of the profits tax exemption for offshore funds to offshore PE funds

5 Please refer to advance ruling cases no 55 to 59 on the IRDrsquos website httpwwwirdgovhkengpprarchtm

bull DIPN 43 (Revised) on Profits Tax Exemption for Offshore Funds which was updated to reflect the legislative changes brought about by the Ordinance and provide additional guidance on the IRDrsquos latest interpretation and assessing practice relating to the offshore fund tax exemption regime as a whole

Please refer to our Hong Kong Financial Services Tax News Flash 2 June 2016 for a more detailed discussion of these DIPNs

The operation of the QCTC tax regime

Subsequent to the enactment of Inland Revenue (Amendment) (No 2) Ordinance 2016 the IRD issued DIPN 52 on 9 September 2016 to set out its views on the interpretation and application of the tax regime for QCTCs the new deeming provision on interest income and the new deduction rules for interest expenses for corporations (other than FIs) carrying on an intra-group financing business in Hong Kong In particular DIPN 52 elaborates in details on issues such as the application of the safe harbour rule under the QCTC tax regime the meaning of an lsquointra-group financing businessrsquo and the lsquosubject to taxrsquo requirement under the new interest expense deduction rules

Please refer to our Hong Kong Tax News Flash September 2016 Issue 9 for a more detailed discussion of DIPN 52

bull Tax treatments of fixed assets and trading stock

bull Utilisation of tax losses

bull Profits tax filing positions of the amalgamating amalgamated company in the year of amalgamation


Update on Hong Kong profits tax cases

The Sheng Kung Hui case - the court held enhancement activities did not constitute trading

The Court of Final Appeal (CFA) handed down its judgment in Church Body of the Hong Kong Sheng Kung Hui amp Hong Kong Sheng Kung Hui Foundation v CIR on 4 February 2016

As previously reported in the December 2015 issue of Hong Kong Tax Review the Court of Appeal (COA) ruled in favour of the taxpayer that there was no change of intention of the taxpayer to hold the land concerned as a capital assets during the period within which the taxpayer performed various activities to enhance the value of the land for redevelopment purposes The COA remitted the case back to the Board of Review (BoR) for it to consider whether there was any change of intention at a later point of time

The Commission of Inland Revenue (CIR) then lodged an appeal against the COArsquos decision The CFA dismissed the CIRrsquos appeal and upheld the COArsquos decision The CFA held that although there is no lsquoenhancement for realisationrsquo principle6 as cited by the COA the COA is correct in holding that there was no change of intention to trading up to the period of time within which the taxpayers had engaged in various activities to enhance the value of the land for realisation This is because none of the taxpayerrsquos enhancement activities within that period had gone beyond what might be

expected of a non-trader owner in similar circumstances As a result the case was remitted back to the BoR as previously ordered by the COA for the Board to determine if a change of intention occurred on a later date

Please refer to our Hong Kong Tax News Flash March 2016 Issue 1 for a more detailed discussion of the CFA judgment in the case

Trading profits were held by the Board as onshore despite little activities in Hong Kong

BoR Case D2514 was published in February 2016 In this case the Board held that the trading profits derived by a Hong Kong company acting as a lsquomiddlemanrsquo between a Mainland company and a Taiwanese company to circumvent the trade restriction between the Mainland and Taiwan were sourced in Hong Kong despite only limited activities were performed by the taxpayer in Hong Kong

The Board took the view that the taxpayerrsquos trading operation was not comparable to that of a traditional trading business and the effecting of purchase and sale contracts was not the effective cause that generated the profits Based on the specific facts of the case the Board held that the lsquomiddlemanrsquo role taken by the taxpayer in Hong Kong and the trans-shipment of goods through Hong Kong were the effective causes of profit generation while the other trading activities (eg entering into and performance of the trading contracts) were just antecedent or incidental activities

As the Boardrsquos decision in this case was made based on the very unique and specific facts of the case there are arguments that the decision should not be generalised and applied to other cases that have different fact pattern However taxpayers lodging an offshore claim on their trading profits should be mindful that the IRD tends to take a more stringent approach in examining the offshore claims in the post-BEPS environment

Please refer to our Hong Kong Tax News Flash April 2016 Issue 3 for a detailed discussion of the Boardrsquos decision in this case

6 In the COArsquos judgment a line of cases were quoted for deducing the lsquoenhancement for realisationrsquo principle which established that activities relating to the enhancement of the value of onersquos capital asset for the purpose of sale would not necessarily point towards a change of intention to one of trading

12 PwC

The taxpayer lost in another BoR case on source of trading profits

Further to BoR Case D2514 the Board held in BoR Case D2814 that the trading profits derived by a Hong Kong company were sourced in Hong Kong on the bases that (1) the effective cause giving rise to the taxpayerrsquos profits was the bringing together the complementary needs of the Mainland manufacturer and the overseas customers (2) the taxpayer failed to substantiate that the purchase and sale contracts were effected outside Hong Kong and (3) considerable trade-related activities were performed by the taxpayer in Hong Kong

Both BoR Case D2514 and this case suggest that the Board may not be taking the traditional approach of focusing on the location(s) where the sale and purchase contracts were effected in determining the source of trading profits Instead the Board will consider all the specific facts and circumstances in particular the roles (including the purposes of setting up a company in Hong Kong) and trade-related activities of the taxpayers in Hong Kong before determining the source of their profits

With a more stringent approach taken by the IRD in examining offshore claims taxpayers should be mindful of the possible detailed questions raised by the IRD the importance of keeping sufficient documentary evidence to discharge the burden of proof and the necessity of formulating a strategy of defending their offshore claims where supporting business activities are performed in Hong Kong

Please refer to our Hong Kong Tax News Flash August 2016 Issue 8 for a detailed discussion of the Boardrsquos decision in this case


Hong Kong salaries tax developments

Increase in certain personal allowances and concessionary deduction effective 201617

The 201617 Budget delivered on 24 February 2016 proposed the following changes in the amounts of allowances and concessionary deduction for salaries tax purposes

bull Increasing the basic allowance to HK$132000 and the married personrsquos allowance to HK$264000

bull Increasing the dependent parentgrandparent allowances to

ndash HK$46000 (for each parentgrandparent aged 60 or above and not residing with the taxpayer throughout the year)

ndash HK$92000 (for each parentgrandparent aged 60 or above and residing with the taxpayer throughout the year)

ndash HK$23000 (for each parentgrandparent aged 55 to 59 and not residing with the taxpayer throughout the year)

ndash HK$46000 (for each parentgrandparent aged 55 to 59 and residing with the taxpayer throughout the year)

bull Increasing the single parent allowance to HK$132000

bull Increasing the deduction ceiling for elderly residential care expenses to HK$92000

All of the above salaries tax proposals were enacted into law in May 2016 and are effective from year of assessment 201617

Please refer to our International Assignment Services ndash Hong Kong Publication March 2016 for a more detailed discussion of the salaries tax measures in the 201617 Budget

The IRDrsquos views on taxability of carried interest

In DIPN 51 on Profits Tax Exemption for Offshore Private Equity Funds issued on 31 May 2016 the IRD briefly states for the first time in a DIPN its views on the taxation of carried interest received by fund executives Specifically the IRD concludes that the genuine nature of carried interest will affect whether it would be regarded as normal investment return (which is not subject to tax) employment income chargeable to salaries tax or serviceperformance fees chargeable to profits tax

Please refer to our International Assignment Services ndash Hong Kong Publication June 2016 for a more detailed discussion of the IRDrsquos views on taxability of carried interest and the implications to employee investment plans

The court held termination payments not provided for in employment contract are taxable

The Court of First Instance handed down its judgment in Poon Cho-ming John v CIR in March 2016 and held that (1) payment in lieu of a discretionary bonus made to the taxpayer and (2) stock option gains derived by the taxpayer from the accelerated vesting of certain previously granted options upon termination of his employment are income from employment and subject to salaries tax despite such payment and accelerated vesting were not provided for in the taxpayerrsquos employment contract

The decision in this case and various legal precedents illustrate that mixed outcomes have occurred in terms of the taxability of termination payments that are not stipulated in an employment contract Whether a termination payment is income from employment and therefore taxable or otherwise is fact-specific any non-taxable claims will not only need to be supported by the terms of the employment contract and termination agreement but must also be justified by the circumstantial evidence

Thorough upfront planning careful drafting of the employment contract and proper wording in a separation agreement to show the true intent of the contacting parties are all equally important to substantiate the real nature of termination payments and to properly manage the potential tax exposure of such payments

Please refer to our International Assignment Services ndash Hong Kong Publication July 2016 for a more detailed discussion of this case

14 PwC

Hong Kong Tax News Flash March 2016 Issue 1 ndash Sheng Kung Huirsquos enhancement activities do not constitute trading albeit there is no lsquoenhancement for realisationrsquo principle

httpwwwpwchkcomhomeenghktax_news_mar2016_1html

Hong Kong Tax News Flash March 2016 Issue 2 ndash Assessing practice on corporate amalgamations


Hong Kong Tax News Flash April 2016 Issue 3 ndash The Board held the trading profits are onshore despite little activities in Hong Kong

httpwwwpwchkcomhomeenghktax_news_apr2016_3html

Hong Kong Tax News Flash May 2016 Issue 4 ndash Hong Kong is embarking on the BEPS journey

httpwwwpwchkcomhomeenghktax_news_may2016_4html

Hong Kong Tax News Flash May 2016 Issue 5 ndash Hong Kong is now in a competitive position for setting up a regional corporate treasury centre


Hong Kong Tax News Flash June 2016 Issue 6 ndash Extension of the valid period of a Hong Kong TRC for the Mainland-HK CDTA eases taxpayersrsquo administrative burden

httpwwwpwchkcomhomeenghktax_news_ jun2016_6html

Hong Kong Tax News Flash July 2016 Issue 7 ndash Hong Kong can now carry out international automatic exchange of information

httpwwwpwchkcomhomeenghktax_news_ jul2016_7html

Hong Kong Tax News Flash August 2016 Issue 8 ndash Trading profits found to be onshore in another Board of Review decision

httpwwwpwchkcomhomeenghktax_news_aug2016_8html

Hong Kong Tax News Flash September 2016 Issue 9 ndash The IRD clarifies the operation of the tax regime on qualifying corporate treasury centres

httpwwwpwchkcomhomeenghktax_news_sep2016_9html

Hong Kong Tax News Flash November 2016 Issue 10 ndash The HKSAR Government reveals plan for implementing BEPS measures in its consultation paper

httpwwwpwchkcomhomeenghktax_news_nov2016_10html

List of Hong Kong Tax News Flashes issued in 2016


The Bill on Hong Kongrsquos open-ended fund company regime gazetted

httpwwwpwchkcomhomeengfstax_news_ jan2016html

The long-awaited DIPN on tax exemption for offshore private equity funds still leaves some issues to be addressed

httpwwwpwchkcomhomeengfstax_news_ jun2016html

Green light for open-ended fund companies in Hong Kong - law enacted

httpwwwpwchkcomhomeengfstax_news_ jun2016_2html

Transfer pricing is more important than ever for fund managers operating in Hong Kong


Shenzhen-Hong Kong Stock Connect at a glance

httpwwwpwchkcomhomeengfstax_news_dec2016html

List of Hong Kong Financial Services Tax News Flashes issued in 2016

List of International Assignment Services - Hong Kong Publications issued in 2016

Understanding the IRDrsquos views on emerging salaries tax issues

httpwwwpwciascomhomeengias_hk_ird_ jan2016html

201617 budget eases salaries tax burdens

httpwwwpwciascomhomeengias_hk_budget_mar2016html

IRDrsquos view on taxability of carried interest and its implications to employee investment plans

httpwwwpwciascomhomeengias_hk_taxability_ jun2016html

Termination payments not provided for in employment contract are held taxable

httpwwwpwciascomhomeengias_hk_taxability_ jul2016html

Introduction of Automatic Exchange of Information (AEOI) - what it will mean for employers and employees

httpwwwpwciascomhomeengias_hk_aeoi_oct2016html

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Contact list

Our leaders

Greater China Chairman Raymund Chao +852 2289 2111

Head of Tax ndash China Hong Kong Singapore and Taiwan Peter Ng +852 2289 1828

China South and Hong Kong Tax Leader Reynold Hung +852 2289 3604

China South Tax Leader Charles Lee +852 2289 8899

Our tax contacts in Hong Kong

Hong Kong Profits Tax International Tax

Agnes Wong (Transportation and Logistics)

+852 2289 3816

Colin Farrell (Transfer Pricing) +852 2289 3800

Florence Yip (Financial Services and Asset Management)

+852 2289 1833

Gwenda Ho (Technology Media and Telecommunication)

+852 2289 3857

Jenny Tsao (Retail and Consumer) +852 2289 3617

Jeremy Choi (Industrial Products) +852 2289 3608

KK So (Real Estate) +852 2289 3789

Nigel Hobler +852 2289 3122

Oscar Lau (Corporate Tax) +852 2289 5603

Phillip Mak (Financial Services Transfer Pricing)

+852 2289 3503

Rex Ho (Financial Services) +852 2289 3026

Suzanne Wat (Common Reporting Standards and Tax Reporting and Strategy)

+852 2289 3002

Accounting and Payroll

Peggy Cheng + 852 2289 1406

China Corporate Tax

Charles Lee +852 2289 8899

Catherine Tsang (Real Estate) +852 2289 5638

Cathy Jiang (Transportation and Logistics)

+852 2289 5659

Jeremy Ngai (Mergers and Acquisitions) +852 2289 5616

Joyce Law +852 2289 5621

LS Goh +852 2289 5609

Company Secretarial

Loretta Chan +852 2289 6700

Customs Duties

Colbert Lam +86 (755) 8261 8228 Practice UnitIndustry Leader Tiang amp Co is associated with PwC Legal International Pte Ltd (a licensed

Foreign Law Practice) in Singapore

Tiang amp Co is an independent Hong Kong law firm Neither Tiang amp Co nor PwC Legal International Pte Ltd has any control over or acts as an agent of or assumes any liability for the acts or omissions of the other

Our Senior Tax Advisors in Hong Kong

David Smith +852 2289 5802

Joseph Tse +852 2289 3811

Marcellus Wong +852 2289 1822

Tim Lui +852 2289 3088

Global Mobility

James Clemence +852 2289 1818

Personal Financial Services

John Wong + 852 2289 1810

Tax Technology

Ann Kwok +852 2289 3808

Tax Controversy

Kaiser Kwan +852 2289 3868

Kenneth Wong +852 2289 3822

Transfer Pricing

Cecilia Lee +852 2289 5690

Colin Farrell +852 2289 3800

Phillip Mak (Financial Services) +852 2289 3503

US Tax Consulting

Anthony Tong +852 2289 3939

Angelica Kwan +852 2289 3966

Paul Ho +852 2289 3061

Sulay Sinha +852 2289 3937

Vivien Lau +852 2289 1845

Wendy Ng +852 2289 3933

Tiang amp Co

Legal

David Tiang +852 3125 1628


Our regional contacts

Beijing

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Changsha

Collin Xiong

collinxnxiongcnpwccom

+86 (755) 8261 8280

Chengdu

William Xu

williamxucnpwccom

+86 (28) 6291 2018

Chongqing

Robert Li

robertlicnpwccom

+86 (21) 2323 2596

Dalian

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Guangzhou

Ingrid Qin

ingridqincnpwccom

+86 (20) 3819 2191

Hangzhou

Jenny Chong

jchongcnpwccom

+86 (21) 2323 3219

Hong Kong

Reynold Hung

reynoldhunghkpwccom

+852 2289 3604

Jinan

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Macau

Grace Cheung

gracecheunghkpwccom

+ 853 8799 5121

Nanjing

Benny Zhang Jane Wang

bennyzhangcnpwccom janeywangcnpwccom

+86 (25) 6608 6278 +86 (21) 2323 2896

Ningbo

Ray Zhu

rayzhucnpwccom

+86 (21) 2323 3071

Qingdao

Helen Zhang

helenhzhangcnpwccom

+ 86 (532) 8089 1815

Shanghai

Peter Ng

peterngcnpwccom

+86 (21) 2323 1828

Shenyang

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Shenzhen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Singapore

Chris Woo

chriswoosgpwccom

+65 6236 3688

Suzhou

Mike Chiang

mikechiangcnpwccom

+86 (512) 6273 1892

Taiwan

Howard Kuo

howardkuotwpwccom

+886 (2) 2729 5226

Tianjin

Kelvin Lee

kelvinleecnpwccom

+86 (22) 2318 3068

Wuhan

Amanda Cao Gang Chen

amandafcaocnpwccom gangchencnpwccom

+86 (21) 2323 3019 +86 (27) 5974 3491

Xiamen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Xian

Elton Huang Jackie Zhao

eltonhuangcnpwccom jackiezhaocnpwccom

+86 (21) 2323 3029 +86 (29) 8469 2661

18 PwC

In the context of this publication China Mainland China or the PRC refers to the Peoplersquos Republic of China but excludes Hong Kong Special Administrative Region Macau Special Administrative Region and Taiwan Region

The information contained in this publication is of a general nature only It is not meant to be comprehensive and does not constitute the rendering of legal tax or other professional advice or service by PricewaterhouseCoopers Limited (PwC) or any other entity within the PwC network PwC has no obligation to update the information as law and practices change The application and impact of laws can vary widely based on the specific facts involved Before taking any action please ensure that you obtain advice specific to your circumstances from your usual PwC client service team or your other advisers

The materials contained in this publication were assembled in December 2016 and were based on the law enforceable and information available at that time

This publication is prepared by PwC National Tax Policy Services in Hong Kong and China which comprises of a team of experienced professionals dedicated to monitoring studying and analysing the existing and evolving policies in taxation and other business regulations in China Hong Kong Singapore and Taiwan They support the PwC partners and staff in their provision of quality professional services to businesses and maintain thought-leadership by sharing knowledge with the relevant tax and other regulatory authorities academies business communities professionals and other interested parties


For more information please contact

Matthew MuiPartnerTel +86 (10) 6533 3028matthewmuicnpwccom

Fergus WongDirectorTel +852 2289 5818ferguswtwonghkpwccom

Anita TsangAssociate DirectorTel +852 2289 3625anitawntsanghkpwccom

Please visit our websites at httpwwwpwccncom (China Home) or httpwwwpwchkcom (Hong Kong Home) for practical insights and professional solutions to current and emerging business issues

copy 2017 PricewaterhouseCoopers Ltd All rights reserved PwC refers to the Hong Kong member firm and may sometimes refer to the PwC network Each member firm is a separate legal entity Please see wwwpwccomstructure for further details

The information contained in this publication is of a general nature only It is not meant to be comprehensive and does not constitute the rendering of legal tax or other professional advice or service by PricewaterhouseCoopers Limited or any other entity within the PwC network

The materials contained in this publication were assembled in December 2016 and were based on information available at that time HK-20161215-4-C1

This is printed on 9lives 55 which is made with an elemental chlorine free process It has 55 recycled fibre and 45 fibre from well-managed forestry 9lives 55 is ISO 14001 certified

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Hong Kong 2016 year in reviewDuring year 2016 the Hong Kong Special Administrative Region (HKSAR) Government took a number of tax initiatives to strengthen the role of Hong Kong as an international financial centre and encourage businesses to use Hong Kong as their regional intellectual property (IP) hub These initiatives are (i) enacting a concessionary tax regime for qualifying corporate treasury centres (QCTCs) in Hong Kong (ii) introducing the open-ended fund company (OFC) as an alternative investment fund vehicle for funds domiciled in Hong Kong (iii) examining the use of tax concession to boost the aircraft leasing business and explore business opportunities in aerospace financing and (iv) proposing a tax deduction for capital expenditure incurred on the purchase of three more types of intellectual property rights (IPRs)

The legislation relating to items (i) and (ii) above was enacted this year whereas the draft tax laws on items (iii) and (iv) are expected to be gazetted within next year All in all these tax measures should put Hong Kong in a more competitive position as an international financing centre a premier regional asset management centre and an IP trading hub

Also with the official launch of the Shenzhen-Hong Kong Stock Connect on 5 December 2016 Hong Kongrsquos strategic role as a platform for international investors to access the China capital market and Mainland investors to go aboard has also been strengthened

The Organisation for Economic Cooperation and Development (OECD)rsquos Base Erosion and Profit Shifting (BEPS) project has entered into the local implementation stage Hong Kong like many other jurisdictions has kicked off the potentially long and ongoing journey of implementing the BEPS measures The HKSAR Government issued a consultation paper on implementing measures to counter BEPS in October 2016 The consultation paper set out the HKSAR Governmentrsquos policy intent and priorities for Hong Kong for implementing the BEPS package In particular the proposed introduction of a transfer pricing (TP) regime and TP documentation requirements (including country-by-country (CbC) reporting) in Hong Kong will significantly reshape the TP landscape in Hong Kong in the coming years

Tax transparency and automatic exchange of financial account information in tax matters (AEOI) are also on top of the international tax agenda in 2016 To fulfil its commitment to implement AEOI by 2018 Hong Kong enacted the AEOI legislation in June 2016 and subsequently signed bilateral competent authority agreements (CAAs) on AEOI with Japan and the United Kingdom (UK) in October 2016

This review recaps the major tax developments that took place in 2016 The details of which have been covered in our various Hong Kong Tax News Flashes Financial Services Tax News Flashes and International Assignment Services ndash Hong Kong Publications issued during the year (see pages 14-15)

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30 June 2016





















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16 PwC

Contact list

Our leaders








+852 2289 3816



+852 2289 1833


+852 2289 3857







+852 2289 3503



+852 2289 3002


Peggy Cheng + 852 2289 1406

China Corporate Tax

Charles Lee +852 2289 8899



+852 2289 5659


Joyce Law +852 2289 5621

LS Goh +852 2289 5609

Company Secretarial


Customs Duties





David Smith +852 2289 5802

Joseph Tse +852 2289 3811


Tim Lui +852 2289 3088

Global Mobility



John Wong + 852 2289 1810

Tax Technology

Ann Kwok +852 2289 3808

Tax Controversy

Kaiser Kwan +852 2289 3868


Transfer Pricing

Cecilia Lee +852 2289 5690



US Tax Consulting



Paul Ho +852 2289 3061

Sulay Sinha +852 2289 3937

Vivien Lau +852 2289 1845

Wendy Ng +852 2289 3933

Tiang amp Co

Legal

David Tiang +852 3125 1628



Beijing

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Changsha

Collin Xiong


+86 (755) 8261 8280

Chengdu

William Xu

williamxucnpwccom

+86 (28) 6291 2018

Chongqing

Robert Li

robertlicnpwccom

+86 (21) 2323 2596

Dalian

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Guangzhou

Ingrid Qin

ingridqincnpwccom

+86 (20) 3819 2191

Hangzhou

Jenny Chong

jchongcnpwccom

+86 (21) 2323 3219

Hong Kong

Reynold Hung

reynoldhunghkpwccom

+852 2289 3604

Jinan

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Macau

Grace Cheung

gracecheunghkpwccom

+ 853 8799 5121

Nanjing



+86 (25) 6608 6278 +86 (21) 2323 2896

Ningbo

Ray Zhu

rayzhucnpwccom

+86 (21) 2323 3071

Qingdao

Helen Zhang

helenhzhangcnpwccom

+ 86 (532) 8089 1815

Shanghai

Peter Ng

peterngcnpwccom

+86 (21) 2323 1828

Shenyang

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Shenzhen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Singapore

Chris Woo

chriswoosgpwccom

+65 6236 3688

Suzhou

Mike Chiang

mikechiangcnpwccom

+86 (512) 6273 1892

Taiwan

Howard Kuo

howardkuotwpwccom

+886 (2) 2729 5226

Tianjin

Kelvin Lee

kelvinleecnpwccom

+86 (22) 2318 3068

Wuhan



+86 (21) 2323 3019 +86 (27) 5974 3491

Xiamen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Xian



+86 (21) 2323 3029 +86 (29) 8469 2661

18 PwC















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27 May 2016





3 June 2016






30 June 2016





















8 PwC
















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12 PwC




























14 PwC













































16 PwC

Contact list

Our leaders








+852 2289 3816



+852 2289 1833


+852 2289 3857







+852 2289 3503



+852 2289 3002


Peggy Cheng + 852 2289 1406

China Corporate Tax

Charles Lee +852 2289 8899



+852 2289 5659


Joyce Law +852 2289 5621

LS Goh +852 2289 5609

Company Secretarial


Customs Duties





David Smith +852 2289 5802

Joseph Tse +852 2289 3811


Tim Lui +852 2289 3088

Global Mobility



John Wong + 852 2289 1810

Tax Technology

Ann Kwok +852 2289 3808

Tax Controversy

Kaiser Kwan +852 2289 3868


Transfer Pricing

Cecilia Lee +852 2289 5690



US Tax Consulting



Paul Ho +852 2289 3061

Sulay Sinha +852 2289 3937

Vivien Lau +852 2289 1845

Wendy Ng +852 2289 3933

Tiang amp Co

Legal

David Tiang +852 3125 1628



Beijing

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Changsha

Collin Xiong


+86 (755) 8261 8280

Chengdu

William Xu

williamxucnpwccom

+86 (28) 6291 2018

Chongqing

Robert Li

robertlicnpwccom

+86 (21) 2323 2596

Dalian

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Guangzhou

Ingrid Qin

ingridqincnpwccom

+86 (20) 3819 2191

Hangzhou

Jenny Chong

jchongcnpwccom

+86 (21) 2323 3219

Hong Kong

Reynold Hung

reynoldhunghkpwccom

+852 2289 3604

Jinan

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Macau

Grace Cheung

gracecheunghkpwccom

+ 853 8799 5121

Nanjing



+86 (25) 6608 6278 +86 (21) 2323 2896

Ningbo

Ray Zhu

rayzhucnpwccom

+86 (21) 2323 3071

Qingdao

Helen Zhang

helenhzhangcnpwccom

+ 86 (532) 8089 1815

Shanghai

Peter Ng

peterngcnpwccom

+86 (21) 2323 1828

Shenyang

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Shenzhen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Singapore

Chris Woo

chriswoosgpwccom

+65 6236 3688

Suzhou

Mike Chiang

mikechiangcnpwccom

+86 (512) 6273 1892

Taiwan

Howard Kuo

howardkuotwpwccom

+886 (2) 2729 5226

Tianjin

Kelvin Lee

kelvinleecnpwccom

+86 (22) 2318 3068

Wuhan



+86 (21) 2323 3019 +86 (27) 5974 3491

Xiamen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Xian



+86 (21) 2323 3029 +86 (29) 8469 2661

18 PwC















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6 PwC






27 May 2016





3 June 2016






30 June 2016





















8 PwC
















10 PwC

































12 PwC




























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16 PwC

Contact list

Our leaders








+852 2289 3816



+852 2289 1833


+852 2289 3857







+852 2289 3503



+852 2289 3002


Peggy Cheng + 852 2289 1406

China Corporate Tax

Charles Lee +852 2289 8899



+852 2289 5659


Joyce Law +852 2289 5621

LS Goh +852 2289 5609

Company Secretarial


Customs Duties





David Smith +852 2289 5802

Joseph Tse +852 2289 3811


Tim Lui +852 2289 3088

Global Mobility



John Wong + 852 2289 1810

Tax Technology

Ann Kwok +852 2289 3808

Tax Controversy

Kaiser Kwan +852 2289 3868


Transfer Pricing

Cecilia Lee +852 2289 5690



US Tax Consulting



Paul Ho +852 2289 3061

Sulay Sinha +852 2289 3937

Vivien Lau +852 2289 1845

Wendy Ng +852 2289 3933

Tiang amp Co

Legal

David Tiang +852 3125 1628



Beijing

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Changsha

Collin Xiong


+86 (755) 8261 8280

Chengdu

William Xu

williamxucnpwccom

+86 (28) 6291 2018

Chongqing

Robert Li

robertlicnpwccom

+86 (21) 2323 2596

Dalian

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Guangzhou

Ingrid Qin

ingridqincnpwccom

+86 (20) 3819 2191

Hangzhou

Jenny Chong

jchongcnpwccom

+86 (21) 2323 3219

Hong Kong

Reynold Hung

reynoldhunghkpwccom

+852 2289 3604

Jinan

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Macau

Grace Cheung

gracecheunghkpwccom

+ 853 8799 5121

Nanjing



+86 (25) 6608 6278 +86 (21) 2323 2896

Ningbo

Ray Zhu

rayzhucnpwccom

+86 (21) 2323 3071

Qingdao

Helen Zhang

helenhzhangcnpwccom

+ 86 (532) 8089 1815

Shanghai

Peter Ng

peterngcnpwccom

+86 (21) 2323 1828

Shenyang

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Shenzhen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Singapore

Chris Woo

chriswoosgpwccom

+65 6236 3688

Suzhou

Mike Chiang

mikechiangcnpwccom

+86 (512) 6273 1892

Taiwan

Howard Kuo

howardkuotwpwccom

+886 (2) 2729 5226

Tianjin

Kelvin Lee

kelvinleecnpwccom

+86 (22) 2318 3068

Wuhan



+86 (21) 2323 3019 +86 (27) 5974 3491

Xiamen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Xian



+86 (21) 2323 3029 +86 (29) 8469 2661

18 PwC















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6 PwC






27 May 2016





3 June 2016






30 June 2016





















8 PwC
















10 PwC

































12 PwC




























14 PwC













































16 PwC

Contact list

Our leaders








+852 2289 3816



+852 2289 1833


+852 2289 3857







+852 2289 3503



+852 2289 3002


Peggy Cheng + 852 2289 1406

China Corporate Tax

Charles Lee +852 2289 8899



+852 2289 5659


Joyce Law +852 2289 5621

LS Goh +852 2289 5609

Company Secretarial


Customs Duties





David Smith +852 2289 5802

Joseph Tse +852 2289 3811


Tim Lui +852 2289 3088

Global Mobility



John Wong + 852 2289 1810

Tax Technology

Ann Kwok +852 2289 3808

Tax Controversy

Kaiser Kwan +852 2289 3868


Transfer Pricing

Cecilia Lee +852 2289 5690



US Tax Consulting



Paul Ho +852 2289 3061

Sulay Sinha +852 2289 3937

Vivien Lau +852 2289 1845

Wendy Ng +852 2289 3933

Tiang amp Co

Legal

David Tiang +852 3125 1628



Beijing

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Changsha

Collin Xiong


+86 (755) 8261 8280

Chengdu

William Xu

williamxucnpwccom

+86 (28) 6291 2018

Chongqing

Robert Li

robertlicnpwccom

+86 (21) 2323 2596

Dalian

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Guangzhou

Ingrid Qin

ingridqincnpwccom

+86 (20) 3819 2191

Hangzhou

Jenny Chong

jchongcnpwccom

+86 (21) 2323 3219

Hong Kong

Reynold Hung

reynoldhunghkpwccom

+852 2289 3604

Jinan

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Macau

Grace Cheung

gracecheunghkpwccom

+ 853 8799 5121

Nanjing



+86 (25) 6608 6278 +86 (21) 2323 2896

Ningbo

Ray Zhu

rayzhucnpwccom

+86 (21) 2323 3071

Qingdao

Helen Zhang

helenhzhangcnpwccom

+ 86 (532) 8089 1815

Shanghai

Peter Ng

peterngcnpwccom

+86 (21) 2323 1828

Shenyang

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Shenzhen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Singapore

Chris Woo

chriswoosgpwccom

+65 6236 3688

Suzhou

Mike Chiang

mikechiangcnpwccom

+86 (512) 6273 1892

Taiwan

Howard Kuo

howardkuotwpwccom

+886 (2) 2729 5226

Tianjin

Kelvin Lee

kelvinleecnpwccom

+86 (22) 2318 3068

Wuhan



+86 (21) 2323 3019 +86 (27) 5974 3491

Xiamen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Xian



+86 (21) 2323 3029 +86 (29) 8469 2661

18 PwC















_GoBack

_GoBack

_GoBack

_GoBack












8 PwC
















10 PwC

































12 PwC




























14 PwC













































16 PwC

Contact list

Our leaders








+852 2289 3816



+852 2289 1833


+852 2289 3857







+852 2289 3503



+852 2289 3002


Peggy Cheng + 852 2289 1406

China Corporate Tax

Charles Lee +852 2289 8899



+852 2289 5659


Joyce Law +852 2289 5621

LS Goh +852 2289 5609

Company Secretarial


Customs Duties





David Smith +852 2289 5802

Joseph Tse +852 2289 3811


Tim Lui +852 2289 3088

Global Mobility



John Wong + 852 2289 1810

Tax Technology

Ann Kwok +852 2289 3808

Tax Controversy

Kaiser Kwan +852 2289 3868


Transfer Pricing

Cecilia Lee +852 2289 5690



US Tax Consulting



Paul Ho +852 2289 3061

Sulay Sinha +852 2289 3937

Vivien Lau +852 2289 1845

Wendy Ng +852 2289 3933

Tiang amp Co

Legal

David Tiang +852 3125 1628



Beijing

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Changsha

Collin Xiong


+86 (755) 8261 8280

Chengdu

William Xu

williamxucnpwccom

+86 (28) 6291 2018

Chongqing

Robert Li

robertlicnpwccom

+86 (21) 2323 2596

Dalian

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Guangzhou

Ingrid Qin

ingridqincnpwccom

+86 (20) 3819 2191

Hangzhou

Jenny Chong

jchongcnpwccom

+86 (21) 2323 3219

Hong Kong

Reynold Hung

reynoldhunghkpwccom

+852 2289 3604

Jinan

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Macau

Grace Cheung

gracecheunghkpwccom

+ 853 8799 5121

Nanjing



+86 (25) 6608 6278 +86 (21) 2323 2896

Ningbo

Ray Zhu

rayzhucnpwccom

+86 (21) 2323 3071

Qingdao

Helen Zhang

helenhzhangcnpwccom

+ 86 (532) 8089 1815

Shanghai

Peter Ng

peterngcnpwccom

+86 (21) 2323 1828

Shenyang

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Shenzhen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Singapore

Chris Woo

chriswoosgpwccom

+65 6236 3688

Suzhou

Mike Chiang

mikechiangcnpwccom

+86 (512) 6273 1892

Taiwan

Howard Kuo

howardkuotwpwccom

+886 (2) 2729 5226

Tianjin

Kelvin Lee

kelvinleecnpwccom

+86 (22) 2318 3068

Wuhan



+86 (21) 2323 3019 +86 (27) 5974 3491

Xiamen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Xian



+86 (21) 2323 3029 +86 (29) 8469 2661

18 PwC















_GoBack

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10 PwC

































12 PwC




























14 PwC













































16 PwC

Contact list

Our leaders








+852 2289 3816



+852 2289 1833


+852 2289 3857







+852 2289 3503



+852 2289 3002


Peggy Cheng + 852 2289 1406

China Corporate Tax

Charles Lee +852 2289 8899



+852 2289 5659


Joyce Law +852 2289 5621

LS Goh +852 2289 5609

Company Secretarial


Customs Duties





David Smith +852 2289 5802

Joseph Tse +852 2289 3811


Tim Lui +852 2289 3088

Global Mobility



John Wong + 852 2289 1810

Tax Technology

Ann Kwok +852 2289 3808

Tax Controversy

Kaiser Kwan +852 2289 3868


Transfer Pricing

Cecilia Lee +852 2289 5690



US Tax Consulting



Paul Ho +852 2289 3061

Sulay Sinha +852 2289 3937

Vivien Lau +852 2289 1845

Wendy Ng +852 2289 3933

Tiang amp Co

Legal

David Tiang +852 3125 1628



Beijing

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Changsha

Collin Xiong


+86 (755) 8261 8280

Chengdu

William Xu

williamxucnpwccom

+86 (28) 6291 2018

Chongqing

Robert Li

robertlicnpwccom

+86 (21) 2323 2596

Dalian

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Guangzhou

Ingrid Qin

ingridqincnpwccom

+86 (20) 3819 2191

Hangzhou

Jenny Chong

jchongcnpwccom

+86 (21) 2323 3219

Hong Kong

Reynold Hung

reynoldhunghkpwccom

+852 2289 3604

Jinan

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Macau

Grace Cheung

gracecheunghkpwccom

+ 853 8799 5121

Nanjing



+86 (25) 6608 6278 +86 (21) 2323 2896

Ningbo

Ray Zhu

rayzhucnpwccom

+86 (21) 2323 3071

Qingdao

Helen Zhang

helenhzhangcnpwccom

+ 86 (532) 8089 1815

Shanghai

Peter Ng

peterngcnpwccom

+86 (21) 2323 1828

Shenyang

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Shenzhen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Singapore

Chris Woo

chriswoosgpwccom

+65 6236 3688

Suzhou

Mike Chiang

mikechiangcnpwccom

+86 (512) 6273 1892

Taiwan

Howard Kuo

howardkuotwpwccom

+886 (2) 2729 5226

Tianjin

Kelvin Lee

kelvinleecnpwccom

+86 (22) 2318 3068

Wuhan



+86 (21) 2323 3019 +86 (27) 5974 3491

Xiamen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Xian



+86 (21) 2323 3029 +86 (29) 8469 2661

18 PwC















_GoBack

_GoBack

_GoBack

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12 PwC




























14 PwC













































16 PwC

Contact list

Our leaders








+852 2289 3816



+852 2289 1833


+852 2289 3857







+852 2289 3503



+852 2289 3002


Peggy Cheng + 852 2289 1406

China Corporate Tax

Charles Lee +852 2289 8899



+852 2289 5659


Joyce Law +852 2289 5621

LS Goh +852 2289 5609

Company Secretarial


Customs Duties





David Smith +852 2289 5802

Joseph Tse +852 2289 3811


Tim Lui +852 2289 3088

Global Mobility



John Wong + 852 2289 1810

Tax Technology

Ann Kwok +852 2289 3808

Tax Controversy

Kaiser Kwan +852 2289 3868


Transfer Pricing

Cecilia Lee +852 2289 5690



US Tax Consulting



Paul Ho +852 2289 3061

Sulay Sinha +852 2289 3937

Vivien Lau +852 2289 1845

Wendy Ng +852 2289 3933

Tiang amp Co

Legal

David Tiang +852 3125 1628



Beijing

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Changsha

Collin Xiong


+86 (755) 8261 8280

Chengdu

William Xu

williamxucnpwccom

+86 (28) 6291 2018

Chongqing

Robert Li

robertlicnpwccom

+86 (21) 2323 2596

Dalian

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Guangzhou

Ingrid Qin

ingridqincnpwccom

+86 (20) 3819 2191

Hangzhou

Jenny Chong

jchongcnpwccom

+86 (21) 2323 3219

Hong Kong

Reynold Hung

reynoldhunghkpwccom

+852 2289 3604

Jinan

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Macau

Grace Cheung

gracecheunghkpwccom

+ 853 8799 5121

Nanjing



+86 (25) 6608 6278 +86 (21) 2323 2896

Ningbo

Ray Zhu

rayzhucnpwccom

+86 (21) 2323 3071

Qingdao

Helen Zhang

helenhzhangcnpwccom

+ 86 (532) 8089 1815

Shanghai

Peter Ng

peterngcnpwccom

+86 (21) 2323 1828

Shenyang

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Shenzhen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Singapore

Chris Woo

chriswoosgpwccom

+65 6236 3688

Suzhou

Mike Chiang

mikechiangcnpwccom

+86 (512) 6273 1892

Taiwan

Howard Kuo

howardkuotwpwccom

+886 (2) 2729 5226

Tianjin

Kelvin Lee

kelvinleecnpwccom

+86 (22) 2318 3068

Wuhan



+86 (21) 2323 3019 +86 (27) 5974 3491

Xiamen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Xian



+86 (21) 2323 3029 +86 (29) 8469 2661

18 PwC















_GoBack

_GoBack

_GoBack

_GoBack























14 PwC













































16 PwC

Contact list

Our leaders








+852 2289 3816



+852 2289 1833


+852 2289 3857







+852 2289 3503



+852 2289 3002


Peggy Cheng + 852 2289 1406

China Corporate Tax

Charles Lee +852 2289 8899



+852 2289 5659


Joyce Law +852 2289 5621

LS Goh +852 2289 5609

Company Secretarial


Customs Duties





David Smith +852 2289 5802

Joseph Tse +852 2289 3811


Tim Lui +852 2289 3088

Global Mobility



John Wong + 852 2289 1810

Tax Technology

Ann Kwok +852 2289 3808

Tax Controversy

Kaiser Kwan +852 2289 3868


Transfer Pricing

Cecilia Lee +852 2289 5690



US Tax Consulting



Paul Ho +852 2289 3061

Sulay Sinha +852 2289 3937

Vivien Lau +852 2289 1845

Wendy Ng +852 2289 3933

Tiang amp Co

Legal

David Tiang +852 3125 1628



Beijing

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Changsha

Collin Xiong


+86 (755) 8261 8280

Chengdu

William Xu

williamxucnpwccom

+86 (28) 6291 2018

Chongqing

Robert Li

robertlicnpwccom

+86 (21) 2323 2596

Dalian

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Guangzhou

Ingrid Qin

ingridqincnpwccom

+86 (20) 3819 2191

Hangzhou

Jenny Chong

jchongcnpwccom

+86 (21) 2323 3219

Hong Kong

Reynold Hung

reynoldhunghkpwccom

+852 2289 3604

Jinan

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Macau

Grace Cheung

gracecheunghkpwccom

+ 853 8799 5121

Nanjing



+86 (25) 6608 6278 +86 (21) 2323 2896

Ningbo

Ray Zhu

rayzhucnpwccom

+86 (21) 2323 3071

Qingdao

Helen Zhang

helenhzhangcnpwccom

+ 86 (532) 8089 1815

Shanghai

Peter Ng

peterngcnpwccom

+86 (21) 2323 1828

Shenyang

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Shenzhen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Singapore

Chris Woo

chriswoosgpwccom

+65 6236 3688

Suzhou

Mike Chiang

mikechiangcnpwccom

+86 (512) 6273 1892

Taiwan

Howard Kuo

howardkuotwpwccom

+886 (2) 2729 5226

Tianjin

Kelvin Lee

kelvinleecnpwccom

+86 (22) 2318 3068

Wuhan



+86 (21) 2323 3019 +86 (27) 5974 3491

Xiamen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Xian



+86 (21) 2323 3029 +86 (29) 8469 2661

18 PwC















_GoBack

_GoBack

_GoBack

_GoBack
























16 PwC

Contact list

Our leaders








+852 2289 3816



+852 2289 1833


+852 2289 3857







+852 2289 3503



+852 2289 3002


Peggy Cheng + 852 2289 1406

China Corporate Tax

Charles Lee +852 2289 8899



+852 2289 5659


Joyce Law +852 2289 5621

LS Goh +852 2289 5609

Company Secretarial


Customs Duties





David Smith +852 2289 5802

Joseph Tse +852 2289 3811


Tim Lui +852 2289 3088

Global Mobility



John Wong + 852 2289 1810

Tax Technology

Ann Kwok +852 2289 3808

Tax Controversy

Kaiser Kwan +852 2289 3868


Transfer Pricing

Cecilia Lee +852 2289 5690



US Tax Consulting



Paul Ho +852 2289 3061

Sulay Sinha +852 2289 3937

Vivien Lau +852 2289 1845

Wendy Ng +852 2289 3933

Tiang amp Co

Legal

David Tiang +852 3125 1628



Beijing

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Changsha

Collin Xiong


+86 (755) 8261 8280

Chengdu

William Xu

williamxucnpwccom

+86 (28) 6291 2018

Chongqing

Robert Li

robertlicnpwccom

+86 (21) 2323 2596

Dalian

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Guangzhou

Ingrid Qin

ingridqincnpwccom

+86 (20) 3819 2191

Hangzhou

Jenny Chong

jchongcnpwccom

+86 (21) 2323 3219

Hong Kong

Reynold Hung

reynoldhunghkpwccom

+852 2289 3604

Jinan

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Macau

Grace Cheung

gracecheunghkpwccom

+ 853 8799 5121

Nanjing



+86 (25) 6608 6278 +86 (21) 2323 2896

Ningbo

Ray Zhu

rayzhucnpwccom

+86 (21) 2323 3071

Qingdao

Helen Zhang

helenhzhangcnpwccom

+ 86 (532) 8089 1815

Shanghai

Peter Ng

peterngcnpwccom

+86 (21) 2323 1828

Shenyang

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Shenzhen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Singapore

Chris Woo

chriswoosgpwccom

+65 6236 3688

Suzhou

Mike Chiang

mikechiangcnpwccom

+86 (512) 6273 1892

Taiwan

Howard Kuo

howardkuotwpwccom

+886 (2) 2729 5226

Tianjin

Kelvin Lee

kelvinleecnpwccom

+86 (22) 2318 3068

Wuhan



+86 (21) 2323 3019 +86 (27) 5974 3491

Xiamen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Xian



+86 (21) 2323 3029 +86 (29) 8469 2661

18 PwC















_GoBack

_GoBack

_GoBack

_GoBack



Beijing

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Changsha

Collin Xiong


+86 (755) 8261 8280

Chengdu

William Xu

williamxucnpwccom

+86 (28) 6291 2018

Chongqing

Robert Li

robertlicnpwccom

+86 (21) 2323 2596

Dalian

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Guangzhou

Ingrid Qin

ingridqincnpwccom

+86 (20) 3819 2191

Hangzhou

Jenny Chong

jchongcnpwccom

+86 (21) 2323 3219

Hong Kong

Reynold Hung

reynoldhunghkpwccom

+852 2289 3604

Jinan

Edwin Wong

edwinwongcnpwccom

+86 (10) 6533 2100

Macau

Grace Cheung

gracecheunghkpwccom

+ 853 8799 5121

Nanjing



+86 (25) 6608 6278 +86 (21) 2323 2896

Ningbo

Ray Zhu

rayzhucnpwccom

+86 (21) 2323 3071

Qingdao

Helen Zhang

helenhzhangcnpwccom

+ 86 (532) 8089 1815

Shanghai

Peter Ng

peterngcnpwccom

+86 (21) 2323 1828

Shenyang

Rex Chan

rexcchancnpwccom

+86 (10) 6533 2022

Shenzhen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Singapore

Chris Woo

chriswoosgpwccom

+65 6236 3688

Suzhou

Mike Chiang

mikechiangcnpwccom

+86 (512) 6273 1892

Taiwan

Howard Kuo

howardkuotwpwccom

+886 (2) 2729 5226

Tianjin

Kelvin Lee

kelvinleecnpwccom

+86 (22) 2318 3068

Wuhan



+86 (21) 2323 3019 +86 (27) 5974 3491

Xiamen

Charles Lee

charlesleecnpwccom

+86 (755) 8261 8899

Xian



+86 (21) 2323 3029 +86 (29) 8469 2661

18 PwC















_GoBack

_GoBack

_GoBack

_GoBack

18 PwC















_GoBack

_GoBack

_GoBack

_GoBack











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Hong Kong Tax Review 2016 - PwC · 2015 issue of Hong Kong Tax Review.1 The fourth protocol...

Documents

Transcript of Hong Kong Tax Review 2016 - PwC · 2015 issue of Hong Kong Tax Review.1 The fourth protocol...