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TOPICS
Current
PRC Tax Regime
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Taxation
Administration
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Classification
of Tax by Function
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Types
of Taxes
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Taxation Administration
Departments
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Turnover Tax
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Value-Added
Tax
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Consumable
Tax
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Business
Tax
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Income Tax
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Wealth Tax
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Resource Tax
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Special-purpose Tax
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Custom Office
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Custom Duties
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Finance Department
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Income Tax
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Special-purpose Tax
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Double
Taxation Relief
In the case of a Hong Kong
resident deriving income that is subject to tax in Hong Kong,
any tax paid in Mainland in respect of that income shall be
allowed as credit against Hong Kong tax payable on that
income. The amount of tax credit cannot exceed the amount of
tax payable in respect of that income. Only tax paid in the
Mainland can be allowed as a credit under the arrangement
against Hong Kong tax. However, if income derived by a Hong
Kong resident from the Mainland does not arise from Hong Kong
it will not be chargeable to tax in Hong Kong.
No tax credit will be allowed as
the question of double taxation does not arise. In the case of
a Hong Kong manufacturer whose profits are apportioned 50:50
basis, only half of the profits will be taxed in Hong Kong.
The other half is regarded as having been derived from the
Mainland thus not chargeable to tax in Hong Kong. If more than
one half of the profits are regarded by the Mainland as
profits derived therefrom, then the tax paid in the Mainland
in respect of such profits, in excess of one half of the total
profits, will be allowed as a credit against the tax payable
in Hong Kong.
Income from aviation, shipping
and land transport operations carried out by Hong Kong
enterprises on the Mainland will be exempted from Mainland tax
(Income tax and business tax).
If you are interested in the
topic and want some more information on this area, please
email us at may.lai@hhliu.com
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