After many mainland enterprises will carry out business income tax settlement. Some enterprises with Hong Kong companies and mainland companies have to pay attention to, the tax system in Hong Kong and our domestic tax system is different, in the mainland is in every year6.30The final settlement of enterprise income tax should be completed before the end of the day. Many expenses need to be adjusted and reduced. However, at the end of the year in Hong Kong, the profits tax of the previous year is deducted according to the actual amount, without adjustment. For example, entertainment expenses are common in our business operations.

Business entertainment expenses in the Mainland shall be written down in accordance with the actual amount incurred in peacetime. But in the final settlement of business income tax, it is five percent of the business income, or the amount of percent60Adopt the principle of "which is lower". The excess is subject to tax deduction.

However, for Hong Kong companies, if business entertainment expenses are incurred due to the operation of the company, the profits tax is deducted according to the actual amount, and will not be restricted because of the level of business entertainment expenses. Thus it can be seen that Hong Kong's tax is much more favorable on the deduction of expenses for companies in Hong Kong.

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