27 September 2016 Hong Kong releases new practice note on corporate treasury centers and interest deductibility Hong Kong enacted the new law on June 3, with retroactive effect from April 1, which allows a deduction on interest paid to overseas associated corporations under certain conditions and provides an 8.25% concessionary tax rate on certain profits derived by a qualifying corporate treasury center (CTC). In the recently issued Departmental Interpretation and Practice Note No. 52 (DIPN 52), Hong Kong's Inland Revenue Department (the IRD) explains, among other things, its interpretation of: (i) what constitutes an "intra-group financing business" and (ii) the "subject to tax" requirement that the overseas associated lenders must satisfy before a Hong Kong taxpayer can claim a tax deduction on the interest payment. A Tax Alert prepared by EY's Global Tax Desk Network, and attached below, provides additional details. Document ID: 2016-1634 |
