#tax1min

Welcome to #tax1min, a series of short videos offering KPMG perspectives on a wide range of tax topics affecting organisations in today’s fast-changing business landscape. Areas covered range from corporate and individual taxes, to private enterprise, asset management; as well as broader China, US and international tax issues.

Scroll down to browse all videos in the series, for more tax insights and subscribe to get regular updates in your inbox.

Operational Transfer Pricing effectively ensures accuracy, compliance and reduces administrative burden for multinational corporations implementing transfer pricing policies.

By 2026, MNEs with a total annual revenue of €750 million that meet the BEPS 2.0 Pillar 2 threshold will be required to file profits tax electronically in Hong Kong. 

The Hong Kong government is enhancing the existing aircraft leasing preferential tax regime to ensure it remains competitive as an international aviation hub.

The Hong Kong Government has launched a 3-month consultation on the local implementation of the global minimum tax under BEPS Pillar Two. 

For e-filing, the IRD are wanting all taxpayers to convert their tax computation and financial statements into an iXBRL format with certain fields tagged. 

Hong Kong e-filing will be mandatory for all MNEs in two years and for all corporate taxpayers by 2030. For the current year, e-filing is voluntary. 

Employers need to be aware of the requirements and risks associated with employee business travel and the impact it may have on the organisation and individual.  

Under the new FSIE rules, offshore IP income could be deemed as taxable when the Hong Kong taxpayer receives the income or is deemed to have received the income in Hong Kong. 

Beginning with 2021 tax year, the IRS has introduced new schedules K-2 and K-3, which replace and expand Schedule K-1 Line 16 reporting on non-U.S. tax and activities.  In this #tax1min video, KPMG’s Becky Wong gives a brief introduction of these schedules.

The British Virgin Islands (BVI) has been added to the EU list of non-cooperative tax jurisdictions, as it has been found to not have sufficiently complied with OECD standards on the exchange of information.  KPMG’s expert introduces the legislative changes that the BVI has implemented in order to comply with the OECD standards.

Renewable energy credits/certificates and carbon credits are essential tools for combating climate change and promoting environmental sustainability. In the 2022 annual meeting between the HKICPA and the IRD, one of the issues that were discussed was the tax deduction of purchase costs of renewable energy credits/certificates or carbon credits. KPMG’s expert discusses the general tax deduction basis and the IRD’s stance against this issue.

Hong Kong e-filing will be mandatory for all MNEs by year 2025, and all other corporate taxpayers by year 2030. Taxpayers should plan ahead on their e-filing and tagging processes, which may impact the broader tax compliance matters. 

In the interim period of the impending arrival of BEPS 2.0, the amendment of IAS 12 offers a relief for deferred tax accounting related to the top-up tax.  KPMG's experts illustrate the details of the amendment and indicates the areas that taxpayers may need to pay attention to.

Asset Management Platform (AMP) is KPMG’s proprietary software for the preparation and planning of partnership tax engagements.  In this #tax1min video, KPMG's experts introduce how the tool could help benefit your US tax reporting process.

The HKSAR Government has launched a consultation on a proposed re-domiciliation regime to attract non-Hong Kong incorporated companies to establish and operate in Hong Kong. KPMG's experts discusse the features of this proposed regime.

The Inland Revenue Department has revisited its approach to issuing Hong Kong Certificates of Resident Status (HK CoR).  KPMG's experts outline its changes.

Under the FSIE regime, participation exemption is another tax exemption requirement for offshore dividend and equity interest disposal gain.  KPMG’s Winson Chan illustrates the key conditions and rules under the exemption requirement.

Under the FSIE rules, offshore interest income received in Hong Kong or deemed to be received in Hong Kong should be taxable for Hong Kong Profits Tax purposes.  KPMG’s Andrew Chan discusses the key areas that taxpayers need to pay attention to, in order to continue making an offshore claim on the interest income.

In this video of the #tax1min #FSIE regime series, KPMG’s Anthony Pak discusses the economic substance requirement, one of the tax exemption requirements for offshore dividend and interest income, and equity interest disposal gain under new regime.

The Foreign Sourced Income Exemption (FSIE) regime became effective on 1 January 2023.  In this #tax1min special series on the FSIE regime, KPMG’s Anita Tsang and Edmond Ma will first recap on the scope of the new regime.

After 3 years of epidemic, Hong Kong has reopened its border.  KPMG’s Eugene Yeung and Isabel Liu discuss how to manage the tax risks while resuming normal.

The 2020-21 Inland Revenue Department’s (“IRD”) annual report shows that the IRD has completed around 1800 field audit and investigation cases this year. KPMG's experts shares insights and observations on this.

Nowadays data management becomes more important, but we’ve witnessed the fact that Tax and Legal functions have always been passive recipients of data. In this #tax1min series, KPMG’s Agnes Tsang introduces the framework of data management for corporate organisations.

The Inland Revenue Department have confirmed that they are moving all corporate taxpayers to an e-filing system. This video discusses this transition and how it will affect corporate taxpayers in the future.

The Inland Revenue Department recently introduced a mechanism that allows taxpayers to seek an opinion from the Commissioner of Inland Revenue on their compliance with the economic substance (ES) requirements under the revised foreign-sourced income exemption regime. MNE groups in Hong Kong currently relying on an offshore claim for non-taxation of offshore passive income should seriously consider such interim measure in order to seek certainty of its ES requirement under the FSIE regime.

In this video, KPMG discusses the updates and comments from the HKSAR Government on certain refinements of the Foreign Source Income Exemption regime (“FSIE”) based on the feedback received from briefing sessions after the release of a consultation paper earlier this year.

The Inland Revenue Department provided comments regarding the ship leasing tax regime in the 2021 annual meeting held with The Hong Kong Institute of Certified Public Accountants. KPMG summarises the matters discussed during the meeting.

The tax concession regimes introduced in recent years generally include the main purposes test as an anti-avoidance provision, which is targeted to catch taxpayers who seek to abuse the tax concessionary regime through artificial means and from shifting profits to Hong Kong to take advantage of the tax concessions in Hong Kong without any commercial reasons and business substance.

In a recent lawsuit, The Court of First Instance overturned the Board of Review’s decision in the Newfair case and allowed the taxpayer’s appeal regarding the profits it derived from the resale of goods. KPMG shares insights on how it will impact businesses and advise to revisit their tax filing positions and devise a defense strategy.

The “two-step approach” that the IRD mentioned in the 2021 annual meeting held with the HKICPA would be adopted to assess whether the permanent establishment of a data center or server of a non-resident enterprise would be chargeable to Hong Kong Profits Tax.

One of the critical components of the jurisdictional ETR estimate calculations is a related and specific requirement by the OECD that is incorporated in section 3.2.3 of the Model Rules. A robust transfer pricing policy and implementation is vital for organizations to get a clear picture of the BEPS 2.0 Pillar 2 liabilities.

The Hong Kong SAR Government has recently issued a consultation paper which sets out its proposal to revisit the existing foreign source income exemption (FSIE) regime. Multinational enterprise groups in Hong Kong should be mindful that the Hong Kong tax treatment of certain offshore passive income is about to go through a significant change and keep monitoring for the latest development to the FSIE regime in Hong Kong.

From 2022/23 onwards, Hong Kong Salaries Taxpayers can enjoy a deduction in domestic rental costs. However, participating in a rental reimbursement arrangement will often be more valuable than the deduction.

As businesses look overseas to capture more market share and diversify their supply chains, having the right tax strategy is essential. KPMG outlines key areas to consider from a tax perspective.

BEPS 2.0 is the biggest change in the tax landscape in a century and the project continues to ramp up. Affected multinational groups need to understand the rules, assess their potential impact, communicate with the key stakeholders on the actions required, and get prepared for the practical challenges of the ongoing compliance with the rules.

KPMG's Private Enterprise Tax Partners discuss the proposed profits tax exemption for family office businesses in Hong Kong. The objective of the tax exemption is to provide tax certainty to investment holding vehicles owned by high-net-worth individuals and their family members in order to attract family offices to be set up and operated in Hong Kong.

With the BEPS 2.0 Pillar 2 model rules being released by the OECD, the attention of in-house tax teams has turned to addressing the practical challenges of determining the minimum tax liabilities in the jurisdictions they are responsible for. Given accounting treatment of certain items may have a significant impact on tax calculations, in-scope MNCs should review the current accounting policies and treatments that they have currently adopted.

An increasing number of businesses are embracing remote work – either to provide flexibility for staff, for COVID-19-related reasons or for expatriates who want to travel home to visit family. With international remote work there are number of implications that need to be taken into account, but with advance planning any barriers should not be insurmountable.

The Hong Kong Inland Revenue Department has been working to take forward the project on electronic filing of Profits Tax returns (“e-filing”) and plans to roll out progressively starting from April 2023 aiming to cover most profits taxpayers in Hong Kong tentatively by 2030.  While e-filing should make it easier for taxpayers to file their tax returns, challenges might arise and we advise companies to plan ahead and get prepared for a smooth transition. 

跨境理财通已经于2021年推出，大湾区内的个人投资者现时可通过对理财通这个渠道，跨境投资各种合资格理财产品。目前尚未有针对理财通的税务文件出台，但结合之前跨境投资的税务政策，我们分享对投资者可能的一些税务影响。

Effective from 5 October 2021, the European Union has added Hong Kong to the “Grey List”, which also included other non-cooperative jurisdictions, for tax purposes. KPMG's Eugene Yeung and Winson Chan talk about the potential changes that may affect the territorial tax system and companies’ operations in Hong Kong.

Accommodation costs are notoriously high in Hong Kong. David Siew and Isabel Liu share views on setting up an efficient rental reimbursement scheme to provide market competitive remuneration packages for employees, while keeping it cost-effective for employers.

Large MNCs may find that their tax liability would increase should the global minimum tax become effective (BEPS2.0). Ivor Morris, Eugene Yeung and Anita Tsang point out how the changes can affect these groups and suggest reactions in this video.