ABB’s weapon: The umbrella guarantee
Feb 24, 2015
Fear looms over taxing of trade finance in Hong Kong
Hong Kong’s tax bureau appears to be taking a new strong stance on companies who use its shores for cheap trade financing. A recent ruling indicates that companies can be taxed even its key operations are based elsewhere. Some fear companies could jump ship and run to Shanghai.
The Hong Kong Inland Revenue Department (IRD) recently published its position on the locality of trading profits, that appears to hit companies who use Hong Kong to raise cheap financing. Specifically referring to a case, the IRD stated in February that if profits are sourced onshore a company is liable for Hong Kong profits tax.
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