Contact Us1.Would a non trading Hong Kong holding company, that grants a master licence to a external subsidiary, on receipt of royalties in HK direct from the subsidiary, be subject to CT in HK? 2. What would constitute carrying on a trade or business in Honk Kong?
We plan to establish a HK IP Holding company, from which company master licences will be granted to a no resident HK company. The subsidiary will then pay down royalties to HK, It is my understanding that on receipt of funds in HK, HK would not tax these royalties, being external income.
TaxConnections Members... Answer This Question
Want To be One of Our Tax Experts? Register Here
Tax Professional Answers
Edward Lee
As the HK holding company wholly owns the licence, and the non-resident HK subsidiary uses such licence (even outside HK) and the sum paid by the subsidiary is allowable for deduction, 100% of the sum received from the use of the licence will be deemed taxable in HK (per deemed sections of HK IR Ordinance) and thus payable by the HK holding company. Any further questions can email to info@edwardlee.com.hk.
Leave a Comment
488 weeks ago