chargeable?

[匿名]

2011-07-26 6:17 pm

chargeable in HK Profits tax?

1) Instead of purchaseing the overseas property in the name of C (HK Ltd.), they are thinking of acquiring the shares of a company which holds the property overseas. C will receive dividends as returns on investment.Discuss the tax implications of the arrangement (1) above

2) C intends to dispose of the investment for profits in two years time. Under the two arrangements outlined above, they want to know whether there is any idfference in the chargeability of the profits derived from the sales of property and the sale of shares in a company holding the relevant property.Compare the differences, if any in the chargeabilityof the profits derived from the sale of property and the sales of shares in a company holding the relevant property as stated in (2) above.

更新1:

Thanks. As you say it is not chargable in HK, any section or case law to support? e.g. Dividend income from overseas shares not chargable in HK tax? Acquiring overseas shares......- not chargable in HK tax?

更新2:

How about contract effected test? It stated either purchase of sales in HK is taxable. It can apply in the acquirition of shares or property.

回答 (1)

Gavin

2011-07-26 7:18 pm

✔ 最佳答案

Acquiring overseas property - not chargable in HK tax
Rental income from overseas property - not chargable in HK tax
Subsequent sales of overseas property - not chargable in HK tax

Acquiring overseas shares - not chargable in HK tax
Dividend income from overseas shares - not chargable in HK tax
Subsequent sales of overseas shares - S&P agreement signed in HK and defined as trade nature according to 6 badges of trade --> chargable in HK tax; in all other cases --> not chargable in HK tax

Conclusion, if C directly acquire the overseas property, in no circustances would be chargable in HK tax. On the other hand, the arrangement of acquiring shares instead of acquire property would have one conidition to be chargable in HK tax.

2011-07-26 13:58:43 補充：
Mainly you may refer to S.14 of IRO and DIPN 21 of IRD.

Acquisition is never subject to any HK tax but is subject to tax in some circumstances when it is sold.

2011-07-26 14:35:31 補充：
So I have said that when the shares have been sold, it may become chargable in HK tax. However, it will not be chargable to HK tax when you just acquire it, right? No HK tax will be imposed on "Acquisition".

2011-07-26 14:39:00 補充：
For property, although S&P agreement signed in HK, it is still not chargable in HK tax. The main source of the matter is the "property". So, when the main source outside HK, not chargable in HK tax.

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