Hong Kong companyUpon receipt of the reply from the Inland Revenue Department, one of the important questions is how to distinguish the detailed rationale for local and overseas transactions, and why the declared overseas profits are not subject to Hong Kong profits tax.

In general, in defenseHong Kong companyThe detailed reasons for distinguishing local and overseas transactions are based on whether the supplier is a Hong Kong company, whether the customer is a Hong Kong company, whether the contract is signed in Hong Kong, whether the goods pass through Hong Kong, whether the business is developed through local resources such as telephone or advertising in Hong Kong, whether the company has participated in trade fairs in Hong Kong, whether the company has leased an office in Hong Kong, whether the company has Hong Kong employees or Where there are employees working in Hong Kong, whether the company's shareholders and directors have Hong Kong nationality or reside in Hong Kong, etc. If a transaction meets one of these criteria, it will be considered a local transaction. If it does not meet any criteria, it will be considered an overseas transaction.

The overseas profits and transactions reported by our company all take place outside Hong Kong and do not occupy local resources in Hong Kong. They are all overseas transactions. Therefore, in accordance with the principle that profits tax should be paid only on the basis of the source of profits tax in Hong Kong, we do not believe that profits from these overseas transactions should be subject to profits tax. Sometimes you can also cite some of the company's overseas deals that year

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