#HONG KONG DAILY EXPENSES REGISTRATION#

someone attempts to make too many claims of too many expenses as well as claiming non-business related expenses, the auditor would ask for justifications and evidence to support such claim. The auditor will actually assess whether the expenses (amount and nature of the expense) booked by the company are reasonable and justifiable to be tax-deductible expenses. If you intend to claim certain expenses against your tax, it is advisable that you bring this up to discuss with your tax accountant. Tax-Deductible Expenses: Auditor’s Approach Expenses related to premises that were not occupied for profit-generating purposes.Payments to (or for the benefit of) spouses or partners.Certain capital expenses or losses that are defined as “non-deductible” as stipulated in Sec 17 of the Hong Kong Inland Revenue Ordinance.Any tax paid except employees’ salaries tax.Sums recoverable under insurance contracts of indemnity.Cost incurred of making asset or property improvement.Expenses that were not incurred in the production of profits.However, according to the Inland Revenue Department of Hong Kong, the following expenses are not tax deductible: In general, expenses incurred for the production of business income are tax deductible. Capital expense on prescribed fixed assets (subject to limitations) and environmental protection machinery.

#HONG KONG DAILY EXPENSES REGISTRATION#

Expenses incurred in the purchase of patents, registration of trademarks, copyrights, and registration of designs.

Charitable donations made to approved charitable institutions.

Expenses related to research and development.

Retirement scheme contributions (subject to certain limitations).

Cost incurred for trademark and patent registration.

Expenses incurred for repair, refurbishment, and replacement of machinery, equipment, and premises.

Foreign taxes paid on income (subject to foreign tax).

Rental – for occupying buildings or land to generate taxable profits.

The following expenses are tax deductible: Please note that the expenses must be the expenses incurred during the basis period for the year of assessment in the production of profits chargeable to tax.

The Section 16 (Ascertainment of chargeable profits) of Inland Revenue Ordinance (“I.R.O.”) has stipulated that all outgoings and expenses of a company, which they have been incurred by the taxpayer in the production of chargeable profits, are tax deductible.Ī transfer of a certain portion of allowable head office administrative expenses (by means of a charge to a local branch or subsidiary in Hong Kong) is allowed as a deduction for Hong Kong tax purposes. Tax Deductible Expenses for Hong Kong Companies: Definition and Basic Rules There are special rules for deduction of certain expenses (for example, interest expenses) and special tax relief is available for certain capital expenditure for Hong Kong Company. In Hong Kong, expenses incurred for producing profits chargeable to tax and that are not capital in nature are generally categorised as the tax-deductible expenses. This post is also available in: 繁體中文 (Chinese (Traditional) ) 简体中文 (Chinese (Simplified) ) Guide of Tax Deductible Expenses for Hong Kong Company Guide to Select Your Hong Kong Company Names.Types of Business Entities to Set Up in Hong Kong.Guide to Hong Kong Company Registration.Guide to Open International Offshore Bank Account for Hong Kong Company.Guide to Bank Account Opening in Hong Kong.Hong Kong Company Incorporation Services.Hong Kong Company Incorporation Specialist

Hong kong daily expenses