An “advance ruling” is issued by the Inland Revenue Department addressing the locality of profits for Hong Kong tax purposes.
Generally, there is no interpretive guideline regarding the source principle in the Hong Kong’s law. Therefore, the interpretation of Hong Kong’s source rules is generally determined by the courts.
The advance ruling dissolve that although the taxpayer’s sales and purchase agreements for goods were carry out via an offshore branch, the taxpayer’s profits had a Hong Kong source and therefore were taxable in Hong Kong.
