Is your offshore claim an opinion — or a hope?
Tax positions and written opinions built on Hong Kong's territorial system: source of income, the offshore claim, treaty access and cross-border planning. Advisory only — we do not file returns.
What we solve
Hong Kong taxes profits that arise in or are derived from Hong Kong. Everything in this practice follows from that sentence — and from the gap between claiming an offshore position and being able to defend one when the Inland Revenue Department asks how the profits actually arose.
We produce written positions: where income arises and why; what the refined foreign-sourced income exemption regime changes for passive income; which treaty applies and what substance it assumes; where withholding leaks out of the group's payment flows. A position you can hand to the bank, the auditor or the IRD — with the facts already marshalled.
What we do
Source-of-income opinions
Written analysis of where profits arise under Hong Kong's territorial system — the document behind a defensible offshore position.
Offshore claim support
Preparation and documentation of offshore claims, and reasoned responses to Inland Revenue Department enquiries.
DTA application
Analysis of treaty access and relief under Hong Kong's double-taxation arrangements, including the arrangement with the Mainland.
Cross-border tax planning
Sequencing income flows, dividends and financing across the group's jurisdictions so the structure works as designed.
Transfer-pricing awareness
Where Hong Kong's transfer-pricing rules touch your intra-group dealings — and what documentation they assume exists.
Withholding tax mapping
Mapping withholding exposures across the group's payment flows: dividends, interest, royalties and services.
Representative experience
Offshore position defended at enquiry
Prepared the factual record and written submissions supporting a services company's offshore claim in response to an IRD enquiry, working with the client's local tax representatives.
Treaty opinion for a Mainland investment
Analysed treaty relief and substance requirements for dividends flowing from a Mainland subsidiary to a Hong Kong holding company.
Group payment flows re-mapped
Restructured royalty and service flows in a four-jurisdiction group to remove unrelieved withholding leakage.
Matters are described without identifying parties or amounts. More representative matters.
Partners recognised in Chambers and Legal 500.
Recognition sits with the individuals who run your matter — not with a logo. The partners responsible for this practice are listed in the leading independent directories.
- 01Initial meeting and conflict check, then a written assessment of your situation.
- 02A proposal with a clear fee structure and scope before any work begins.
- 03The matter is run with regular updates and direct partner access.
- 04A result report and a recommendation on next steps.
The team for this practice
Raymond Ng
Territorial tax positions, DTA access, holding structures, bank onboarding.
Grace Lau
Wealth and tax support, document management.
Polina Drozd
Holding structures, Hong Kong tax positions, bank onboarding.
Questions clients ask
What does Hong Kong's territorial principle mean in practice?
Profits tax is charged on profits arising in or derived from Hong Kong. Profits genuinely sourced outside Hong Kong are, as a rule, outside the charge. Source is decided by what was done to earn the profit and where — contracts, decisions, operations — not by where the company is incorporated or the invoice is issued.
Has the foreign-sourced income exemption changed?
Yes. Since 2023, a refined regime applies to specified foreign-sourced passive income — such as dividends, interest, certain gains and IP income — received in Hong Kong by entities of multinational groups, with economic substance and participation conditions. Whether it affects you depends on the group's profile, which is the first thing we check.
Do you file tax returns?
No. This is an advisory practice: positions, opinions and enquiry responses. Filings are made by local tax representatives, with whom we work routinely.
What makes an offshore claim fail?
Facts that contradict it: contracts negotiated from Hong Kong, decisions taken in Hong Kong, and a paper trail that was never built. The cure is contemporaneous documentation — built while the business operates, not assembled after the enquiry letter arrives.
Can our structure rely on the arrangement with the Mainland?
Possibly — the Hong Kong–Mainland double-taxation arrangement offers significant relief, but it assumes beneficial ownership and real substance in the Hong Kong company. We test the structure against those conditions before anyone relies on the rate.
What documents support a source-of-income opinion?
The contracts and where they were negotiated and signed; board minutes and travel records showing where decisions were made; and the operational record of where the work actually happened.
The opinion is only as strong as this factual base — assembling it is half the engagement.
When should an existing tax position be reviewed?
When the law moves — as it did with the refined foreign-sourced income exemption regime — when the business model changes, and before any transaction that relies on the position. Positions age; a review costs less attention than an enquiry.
From the Tax Positions cluster
The territorial principle: what the IRD actually tests
The refined FSIE regime: who is in scope
Treaty relief with the Mainland: beneficial ownership in practice
Practitioner notes for this practice are in preparation and will appear in the Tax Positions cluster.
Visit the Insights hubDiscuss a Tax Positions matter.
A written assessment of your position and options is the usual first step.