Hong Kong Tax Agency Posts Advance Ruling on Treatment of Dividends Remitted to Offshore Subsidiary

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The Hong Kong Inland Revenue Department Nov. 13 posted online Advance Ruling No. 72, clarifying the treatment of dividends remitted to a taxpayer’s offshore subsidiary. The taxpayer, a Hong Kong-based private limited company, established two nonresident subsidiaries in the same jurisdiction, one of which engaged in electronic product manufacturing and sales. The subsidiaries’ jurisdiction offered new investment projects in industrial parks a tax exemption for two years, and a 50 percent reduction for the next four years. The taxpayer received offshore dividend income from the subsidiary manufacturing company, which was remitted to the second nonresident subsidiary as a capital investment. …

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