At the end of December 2016, the public has submitted its responses to the Hong Kong Government’s consultation paper proposing the introduction of transfer pricing (“TP”) rules for Hong Kong.
It is too early to predict whether the Government will take on board the suggestions made by the respondents and whether these suggestions will be reflected in the draft TP legislation.
Hong Kong corporates need to start planning for the introduction of the TP documentation rules and consider how this may impact the pricing of their related party transactions.
With more tax disputes being imminent, it is important for Hong Kong to have an effective competent authority and a practical Advance Pricing Arrangement programme to mitigate future dispute case-loads.
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