On The Rules For Determining The Sources Of Profits Tax In Hong Kong And Its Reference Significance

Hong Kong is a place where only taxed the income derived from its jurisdiction.There are three conditions for tax collection in Hong Kong,that is,the person must carry on a trade,profession or business in Hong Kong;the profits to be charged must be from such trade,profession or business carried on by the person in Hong Kong;and the profits must be profits arising in or derived from Hong Kong.However,there are only a few words regulated the rules that how to determine the source of profit of profit tax in the statute law of Hong Kong,Hong Kong has relied on precedents to summarize the Departmental Interpretation and Practice Notes No.21-Locality of Profits as a tool to guide Hong Kong taxpayers to ascertain the source of income.The guideline summarizes the guiding principles for determining the source of income,and according to the different transaction summarized the source of the standard,reflects the combination of principle and clarity.The rules for determining the sources of of mainland enterprises income tax are stipulated in Article 7th of the regulations on the Implementation Rules of the Enterprise Income Tax Law of the People's Republic of China.The contents provided for in the article contains some deficiency,such as a lack of certainty in the use of terms and covers only a few cases.The implementation of the regulations was earlier than before,and there were no related documents to refine and amend the rules of source determination,which made the deficiencies of the rules exist all the time.In the case of cases not covered by precedents and guidelines,the "broad guiding principles" in the principle which determining the source of profits tax in Hong Kong may serve as the focal point for determining the source of income and,on the basis of this,find out a reasonable source of income.Therefore,we can introduce "broad guiding principles".DIPN21 and DIPN49 summarized the criteria for how to determine the source of income on the basis of specific cases.Classified summaries can enhance the certainty of how to apply this terms.Using the rules of source in Hong Kong as a reference can make up for the lack of certainty and inadequate coverage of income source rules in the mainland.