Let's say I operate a Hong Kong company from Bulgaria, which has a 10% income tax.
I pay my self a salary or I simply invoice my own Hong Kong company $12,500 USD a month for my services and I pay the 10% on that salary in Bulgaria.
Does the Hong Kong company have to withold any tax at all in Hong Kong as payroll/payg to my personal name?
I read in some places it does, and it other places it does not, when the Hong Kong company and also the Director are both considered non-residents of Hong Kong.
In my case: 100% of services provided are outside HK, for non HK people, and the Director lives 100% outside of HK. And also the suppliers, 100% outside of HK.
I found this online, is this correct? does it mean there is NOT witholding personal tax on salaries from Hong Kong companies to their non-resident directors?
Do I have to be eligible and provide proof for this? is it automatic?
What i read here is very grey and nothing is clear lol.
"
The taxation laws regarding salaries paid by non-resident companies to individuals can vary depending on the jurisdiction. In Hong Kong, if you are a non-resident individual receiving a salary or fees for services performed outside of Hong Kong, you generally wouldn't be subject to salaries tax or withholding tax in Hong Kong.
However, if the services you are providing are performed within Hong Kong, then the company might have obligations regarding withholding taxes. Hong Kong follows a territorial-based tax system, which means that only income arising in or derived from Hong Kong is subject to tax there.
To determine whether a taxpayer’s employment is located outside Hong Kong (SAR), and thereforeregarded as being a non-Hong Kong (SAR)-located employment, the Inland Revenue Department willtake into account all of the relevant facts, with particular emphasis on:• where the contract of employment was negotiated and entered into and is enforceable, whether inHong Kong (SAR) or outside Hong Kong (SAR)• where the employer is resident, whether in Hong Kong (SAR) or outside Hong Kong (SAR)• where the employee’s remuneration is paid to them, whether in Hong Kong (SAR) or outside HongKong (SAR).(Different rules apply to determine the location of director’s fees and a pension.)Document Classification - KPMG Public 8There are a number of exemptions from salaries tax available to employees. In general, if all services withrespect to the employment are rendered outside Hong Kong (SAR), regardless of the status of theemployment (see earlier), the income will be fully exempt from tax"
I pay my self a salary or I simply invoice my own Hong Kong company $12,500 USD a month for my services and I pay the 10% on that salary in Bulgaria.
Does the Hong Kong company have to withold any tax at all in Hong Kong as payroll/payg to my personal name?
I read in some places it does, and it other places it does not, when the Hong Kong company and also the Director are both considered non-residents of Hong Kong.
In my case: 100% of services provided are outside HK, for non HK people, and the Director lives 100% outside of HK. And also the suppliers, 100% outside of HK.
I found this online, is this correct? does it mean there is NOT witholding personal tax on salaries from Hong Kong companies to their non-resident directors?
Do I have to be eligible and provide proof for this? is it automatic?
What i read here is very grey and nothing is clear lol.
"
The taxation laws regarding salaries paid by non-resident companies to individuals can vary depending on the jurisdiction. In Hong Kong, if you are a non-resident individual receiving a salary or fees for services performed outside of Hong Kong, you generally wouldn't be subject to salaries tax or withholding tax in Hong Kong.
However, if the services you are providing are performed within Hong Kong, then the company might have obligations regarding withholding taxes. Hong Kong follows a territorial-based tax system, which means that only income arising in or derived from Hong Kong is subject to tax there.
To determine whether a taxpayer’s employment is located outside Hong Kong (SAR), and thereforeregarded as being a non-Hong Kong (SAR)-located employment, the Inland Revenue Department willtake into account all of the relevant facts, with particular emphasis on:• where the contract of employment was negotiated and entered into and is enforceable, whether inHong Kong (SAR) or outside Hong Kong (SAR)• where the employer is resident, whether in Hong Kong (SAR) or outside Hong Kong (SAR)• where the employee’s remuneration is paid to them, whether in Hong Kong (SAR) or outside HongKong (SAR).(Different rules apply to determine the location of director’s fees and a pension.)Document Classification - KPMG Public 8There are a number of exemptions from salaries tax available to employees. In general, if all services withrespect to the employment are rendered outside Hong Kong (SAR), regardless of the status of theemployment (see earlier), the income will be fully exempt from tax"