Hong Kong companyBecause of its superior tax system, it is the preferred tool for many domestic enterprises to do international business. Under Hong Kong tax law, profits originating outside Hong Kong are not subject to profits tax in Hong Kong. There are many specific conditions, among which a very important point is Hong Kong companies and nonHong Kong companyThe transaction belongs to offshore profit, otherwise belongs to onshore profit. If a Hong Kong company makes a payment to another Hong Kong company, does that transaction have to be onshore?

The answer is not necessarily, because you need to analyze these twoHong Kong companyWhat the nature of the money is, for example, between two companies, not business, that is, generating no profit, it does not matter whether it is offshore or onshore. Another example is that the Hong Kong company signs the sales contract with the Chinese customer, the invoice is issued by the Chinese customer, the goods are also sent directly by the European supplier to the Chinese customer, but the Chinese customer entrusts a Hong Kong company to pay the money, this transaction appears to be between the Hong Kong company and the Chinese customerHong Kong companyBut essentially the Hong Kong company is getting the profits from the Chinese customer. The transaction is with the Chinese company and the Hong Kong company paying the money is paying the profits directly on behalf of the Chinese company. Therefore, the profits from the transaction should be judged as offshore profits.

The above examples show that the decision of onshore or offshore should be made on a case-by-case basis and in accordance with the principle of substance over form.

CycloseThe company is committed to providing domestic and foreign customers with corporate audit, tax declaration, registration, annual inspection, tax planning and other services in Hong Kong, Singapore, Dubai and other regions. Efficient, rigorous, intimate service has been favored by many private enterprises, listed companies and large state-owned enterprises.