So how do you apply for Offshore Tax Exemption Claim?

In general, the claim for offshore tax exemption is lodged together with the submission of the first profit tax return.  For newly incorporated company, the first profits tax return notice will be issued by IRD in 18 months after the date of incorporation.

The profits tax return has to be filed together with the following documents:

A certified copy of the Financial Statement and Profit and Loss Account/ Income Statement;
Auditor’s Report;
A tax computation with supporting schedules showing how the Assessable Profits is arrived at;
Offshore tax exemption application on the Profit Tax Return Form.

IRD will normally request the company to provide additional information and documents to support the claim.  IRD may review randomly selected transactions and check whether the various activities involved in these transactions took place offshore.

It is therefore advisable to keep complete transaction records to illustrate the fact that all activities took place outside Hong Kong such as:

organizational chart showing location of offshore operation
emails, faxes & itemized telephone bills showing to which numbers calls are made to clients / suppliers
memos of meetings with customers and suppliers
travel receipts & passport copies showing locations and dates of visit
purchase orders, sales orders and shipping documents

For more info – drop us a line at

Leave a comment

Your email address will not be published. Required fields are marked *