Compared to many other countries, Hong Kong employers have a relatively straight forward payroll process because there is no monthly payroll tax withholding. In the absence of monthly payroll tax withholding obligations, the Inland Revenue Department would therefore rely on employers to file full and accurate returns at the end of every tax year. Employers do and often commit missteps and there are many pitfalls associated with employer's tax reporting. At a lunchtime seminar on 28 January, Ami Cheung, Partner, Human Capital, EY, spoke on the risks associated with errors and omissions that may be inadvertently committed by employers when filing their payroll returns.
The OECD has, in recent years, been working on an international platform for governments to redesign a common taxation architecture aimed at promoting transparency and minimising double non-taxation. Dubbed Base Erosion and Profit Shifting (BEPS), an initial framework was unveiled on 16 September,2014,by the OECD providing useful insights for taxpayers engaged in cross-border transactions. BEPS represents one of the most significant developments on the international taxation landscape as ever more governments, including China, strive to safeguard their tax base and curtail tax avoidance. As an international standard, BEPS will surely affect Hong Kong businesses.Anthony Lau and Patrick Cheung, Tax Partners at Deloitte China, shared their views on the potential impact of BEPS, as well as its effects on transfer pricing arrangements on intangibles and service transactions, and transfer pricing documentation.
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