Hong Kong: New tax and transfer pricing legislation to counter base erosion and profit shifting
Published: 16 January 2018
On 29 December 2017, the Government of Hong Kong published an amendment bill to implement the OECD minimum standards to counter base erosion and profit shifting (BEPS) and to codify certain transfer pricing principles.
The changes have been made with an intention to align the tax laws in Hong Kong with outcomes of the OECD BEPS Project while keeping intact the competitive nature of the tax regime. Some of the important proposals in the bill are to amend certain preferential tax regimes; incorporate the OECD’s substantial activities requirement into relevant tax measures; introduce a statutory dispute resolution mechanism; set requirements for intra group transaction documentation; and establish advance pricing agreements.