What Is an Offshore Tax Claim and When Can It Apply?

An offshore tax claim allows a company to claim 0% profits tax on profits derived outside Hong Kong.

Eligibility requirements:

• No customers, vendors, or contracts in Hong Kong.
• No physical offices, employees, web hosting, warehousing, shipping, or business activities in Hong Kong.
• Management personnel or directors do not make decisions in Hong Kong.
• No properties owned or rented in Hong Kong.
• No physical presence in Hong Kong for more than 60 days per year.

Application and timeline:

• Apply in the yearly PTR and audited financial statements.
• The HKIRD may raise enquiries, requesting documents to verify profits.
• Respond within 1–2 months per enquiry.
• Offshore status is typically valid for 3 years, provided operations remain offshore.

Risks:

• Rejection due to insufficient evidence results in full profits tax liability.
• Offshore claims do not exempt tax obligations in other jurisdictions.