Hong Kong Tax – Advance Ruling

Advance Ruling under section 88A of the Hong Kong Inland Revenue Ordinance is for those who wish to ascertain the tax position of a contemplated transaction or arrangement make an application for a ruling from the Commissioner of the Inland Revenue Department (IRD).

Such ruling will only be given for a seriously contemplated transaction but not for hypothetical situation or for a matter where the profits tax is due and payable.

The Commissioner will decline to make such ruling in some circumstances, such as the applicant has not provided sufficient information; or the Commissioner considers that it would be unreasonable to make a ruling in view of the resources available to him.

The ruling, if made, will state the identity of the taxpayer; the applicable statutory provision and arrangement; the covered period; and any material assumptions made. It will be legally binding on the Commissioner provided that the taxpayer precisely adheres to the facts stated in the application. The IRD may also publish selected rulings with the confidentiality of the taxpayer preserved. The taxpayer who has obtained a ruling should state the existence of the ruling, the reliance on the ruling and any material changes in the tax return.