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Taxation/Dividend from UK Ltd to HK parent Company

Would dividend from wholly owned UK subsidiary be liable for any taxes (corp tax excluding)

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I am a UK tax resident who is a 1/3 shareholder in a Hong Kong company that has a wholly owned UK subsidiary. This is (probably) a very obvious question, but after paying the corporation tax on our UK profits, would any dividends to the parent company be taxed as well, or would they be exempt?

On a related note, I was also wondering if we needed to actually have a UK subsidiary at all or whether we could book revenue from UK clients directly to the HK parent? I am assuming not, as I am based in the UK and carrying out some of the work and we anticipate going over the VAT threshold in a couple months, though at the moment, around 70% of our revenue is derived from clients in HK and SE Asia.

Your insights would be much appreciated!

Replies (4)

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By johngroganjga
24th Sep 2020 10:16

This is a UK website, so there is no point in asking questions about Hong Kong tax.

Does the HK holding company not have accountants in HK who can explain its HK tax position on dividends from its UK subsidiary?

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By Wilson Philips
24th Sep 2020 10:25

You'll find the answer in the UK-Hong Kong Double Tax treaty

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By Justin Bryant
24th Sep 2020 14:51

HK's tax rate on all foreign-source income (which obviously includes foreign dividends) is 0%.

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Replying to Justin Bryant:
By Wilson Philips
24th Sep 2020 16:15

Not strictly correct (although effectively so). And there are one or two exceptions.

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