Pre-conditions for liability to Profits Tax under Hong Kong Company
Under the Inland Revenue Ordinance, a person is chargeable to Profits Tax under the following conditions:
- He carries on a trade, profession or business in Hong Kong.
- The trade, profession or business derives profits.
- The profits arise in or are derived from Hong Kong.
The first two conditions are straightforward. Some elaboration is necessary for the third. Let us have a brief look at the basic principles for determining the source of profits.