Tax Efficiency Profits of Hong Kong Commission and Consultancy company – Services Performed outside Hong Kong
The place where service is performed
When a business earns commission or consultancy by securing buyers for products or by securing suppliers of products required by customers, the activity which gives rise to the commission income is the arrangement of the business to be transacted between the principals. The source of the income is the place where the activities of the commission or consultancy agent are performed. If such activities are performed in Hong Kong, the income has a source in Hong Kong.
Factors such as the place where the principals are located, how they are identified by the commission agent or consultant , and the place where incidental activities are performed prior or subsequent to the earning of the commission or consultancy are not generally relevant in determining the source of the commission or consultancy income.
In the event that the commission or consultancy income is earned by a person carrying on a business in Hong Kong but the corresponding activities which give rise to the commission or consultancy are performed entirely outside Hong Kong like in Europe , America or Mainland China , the commission or consultancy income is not taxable under Hong Kong company.