Wilson Accounting Limited
Tax PlanningService
What is Tax Planning?
Tax planning is more than just estimating how much you pay in your annual tax and how much you should pay. The higher level of tax planning is to review the overall financial health of you and your company and ensure that all aspects are aligned to ensure that you pay as little tax as possible.
Tax planning is the legal way to reduce the amount of tax paid in any financial year. It can help you take advantage of the tax exemptions, deductions, and benefits offered by the authorities to minimize your liability.
Why do I need tax planning?
Tax planning is an important part of financial planning. It ensures tax savings while complying with legal obligations and requirements. The main concept of tax planning is to save money and reduce the tax burden.
Tax evasion is an illegal way to obtain tax benefits. Tax planning is an attempt to obtain tax benefits through legal legal channels. With effective tax planning, companies/taxpayers can enjoy maximum tax savings.
Here are some tax planning tips:
- Personal expenses are paid by the company - Personal expenses paid by the company are the most common method to minimize the tax liability of small and medium-sized businesses. In order for this method of deduction of personal expenses to be paid in accordance with the requirements of the law, the company should prove that these expenses are not personal expenses as defined in the tax regulations. In this sense, the company should clearly state in the employment contract that the costs of the company and the directors should be borne by the company.
- Housing Rent - The rent of a director's or employee's house can be reimbursed by the employer. Employees are only required to contribute up to 10% of their salary. The employer can deduct the full amount from the account.
- Deductible expenses and depreciation - All out-of-office expenses and expenses, other than household, private or capital expenditures, and expenses incurred to increase assessable income, are allowed to be deducted from assessable income. Taxpayers can claim deductions for fees and expenses on their tax returns, but must keep proper records and receipts.
- 60-day visit requirement - In general, if a person visits Hong Kong for not more than 60 days, he will be exempted from salaries tax, which will also be counted in the calculation of the number of days in Hong Kong, whether or not his purpose in Hong Kong is business-related. A part of a day in Hong Kong will also be counted as a full day.
We provide the following services to help you achieve this goal:
- A consultation session to extensively review your current tax position
- Provide you with follow-up advice and action plans to maximize your tax exemptions, tax deductions, and benefits provided by the authorities.
- Ensure cost efficiencies are in place
- We’ll guide you on how to maximize the tax exemptions, deductions, and benefits offered by the authorities to minimize your tax liability
- Family Office Claims
- Accommodation Claims
- Director’s fees/salaries
- Dividend declaration
- MPF
- Personal Insurance Claims
When a company commences business outside Hong Kong, no additional tax will be levied even if the bank account is held in Hong Kong. An increase in income, or income from non-Hong Kong sources, is also not subject to corporate profits tax in Hong Kong. In other words, if you are running a Hong Kong company and the bank financial arrangements are held in Hong Kong, but you live overseas, or your clients’ income is derived from overseas, your Hong Kong company is not subject to Hong Kong profits tax. Only the increased income is derived from Hong Kong and is subject to Hong Kong corporate profits tax.
• Review of company operations to meet offshore claims
• Provide advice and action plans to meet offshore claims
• Assist in filing offshore claims to relieve all or part of your tax liabilities
• Liaise with the Inland Revenue Department on offshore claims
- Hong Kong is a business-friendly city with comprehensive Double Taxation Agreements (DTAs) with more than 40 jurisdictions on double taxation issues. These income tax treaties exempt businesses from double taxation when operating in Hong Kong and other countries.
- Assistance in obtaining a Certificate of Tax Residency to help the company reduce or avoid withholding tax on dividends, interest, royalties and licence fees, or potentially avoid paying capital gains tax in the jurisdiction where the payment is made.
