Tax Services

Under the OECD guidance, the worldwide tax authorities are cooperating with each other to increase transparency by exchanging financial information of their taxpayers. We see the trend from primarily dealing with Hong Kong tax issues with Inland Revenue Department in the past to extending our services to international tax level for our listed and multi-national clients.

Global tax authorities are now more eager to impose tax on non-resident companies, no matter via permanent establishment (PE), Controlled Foreign Corporation (CFC), transfer pricing, diverted profit tax, etc. We recognize the increasing need for our client to consider tax issues in cross-border transactions and arrangements.

To cater for our client’s needs, we have developed our international tax team and are experienced in handling tax group structuring and transfer pricing tax planning as well as documentation. We helped our client on tax planning to reduce their international tax burden and tax risk as well as on tax challenges proposed by the tax authorities.

China is definitely one of the jurisdictions which have close business relationship with Hong Kong companies. Our PRC tax team can advise client on their PRC tax exposure as well as cross-border transactions and arrangements between Hong Kong and the PRC.

We acknowledge that clients are actively approaching tax advisors to understand taxpayers’ responsibilities from tax perspective and exploring for future tax planning opportunities to minimize possible tax risks. We, a specialized tax team with professionals experienced in wide range of taxation areas, can assist you in the following areas:

1. Hong Kong Tax Filing and Compliance Services
   • Preparing tax returns
   • Responding to enquiries issued by the Hong Kong Inland Revenue Department


2. Hong Kong Profits Tax Advisory and Planning Services
   • Reviewing company’s shareholding structure, organizational structure, operating model, financial and tax position
   • Identifying issues and assessing risks of receiving enquiries, tax audits, or investigations from the Hong Kong Inland Revenue Department
   • Providing recommendations on tax planning, drafting contracts, agreements, and related documents
   • Communicating with the company to adjust recommendations and ensure proper implementation
   • Ensuring the operating model is reflected accordingly in the company’s audit report and profits tax reporting documents to achieve tax efficiency


3. Hong Kong Tax Filing and Compliance Services
   • Reviewing individual remuneration and duties, financial and tax position
   • Providing recommendations on tax planning, drafting contracts, agreements, and related documents
   • Ensuring the employment arrangements are reflected accordingly in the individual’s tax return to achieve tax efficiency


4. Transfer Pricing Related Services
   • Preparing transfer pricing documentation (master file, local file, and country-by-country report) as well as benchmarking analysis reports
   • Assessing transfer pricing and tax risks that may lead to base erosion, and identifying arrangements that trigger such risks
   • Evaluating the risk of receiving enquiries, tax audits, or investigations from the Hong Kong Inland Revenue Department


5. Tax Advisory Services Related to Initial Public Offerings (IPOs)
   • Reviewing company’s shareholding structure, organizational structure, operating model, financial and tax position
   • Providing recommendations on tax planning, drafting contracts, agreements, and related documents
   • Communicating with the company and assisting in voluntary disclosure to the Hong Kong Inland Revenue Department in the case of under-reporting of profits


6. Application, Advisory, and Planning Services for Hong Kong Tax Resident Certificates (for individuals and companies)
   • Reviewing the circumstances of the individual or company and giving opinions on the eligibility for obtaining a Hong Kong tax resident certificate
   • Proposing feasible plans to facilitate successful application, allowing applicants to make necessary adjustments
   • Submitting applications to the Hong Kong Inland Revenue Department and, if required, liaising with the Department for the application


7. Services Related to Field Audits and Investigations
   • Liaising with officers of the Hong Kong Inland Revenue Department to understand the focus of tax investigations
   • Reviewing company’s shareholding structure, organizational structure, operating model, financial and tax position
   • Preparing supporting materials and drafting reply letters in accordance with enquiries issued by the Hong Kong Inland Revenue Department
   • Identifying issues and risks, and providing practical recommendations
   • Conducting rehearsal meetings with company management to prepare for the face-to-face meeting with the Hong Kong Inland Revenue Department, ensuring confidence in handling direct questioning
   • Accompanying management in their meeting with the Hong Kong Inland Revenue Department
   • Filing objections against protective assessment notices issued by the Hong Kong Inland Revenue Department
   • Maintaining ongoing communication with the Hong Kong Inland Revenue Department
   • Drafting and submitting case resolution documents, negotiating with the Hong Kong Inland Revenue Department on the basis for additional tax and penalty calculations
   • Explaining the Inland Revenue Department’s position to management, confirming acceptable amounts of additional tax and penalties

By CHENG & CHENG TAXATION SERVICES LIMITED