New Profit Attribution for Hong Kong Permanent Establishments Just Announced

By in

Hong Kong’s Inland Revenue Department has issued a practice note clarifying how it will interpret the concept of permanent establishment in Hong Kong and the practise for how profits are attributed Hong Kong permanent establishments (PEs).

It considers a newly enacted section of the Hong Kong Inland Revenue Ordinance, which follows the OECD’s definition of PEs to the word, in order to determine the PE status of a non-treaty country resident, subject to specific activity exemptions and anti-fragmentation regulations.