Henry Kwong Tax - International

13/10/2026

𝐓𝐡𝐞 𝐐𝐮𝐞𝐬𝐭𝐢𝐨𝐧 𝐄𝐯𝐞𝐫𝐲 𝐀𝐝𝐯𝐢𝐬𝐞𝐫 𝐒𝐡𝐨𝐮𝐥𝐝 𝐀𝐬𝐤 𝐅𝐢𝐫𝐬𝐭

Tax advisers should stop beginning with the Hong Kong company’s accounts.

The first question should be:

“Has the entire group met the EUR 750 million consolidated annual revenue threshold in at least two of the four preceding fiscal years?”

That single question determines whether the client may fall within a much broader compliance framework.

The equivalent threshold is approximately:

RMB 6 billion or HKD6.3 millsion (subject to exchange rate; EUR 750 million is the legal threshold).

Auditors and accountants often focus on the entity they have been engaged to review.

But the relevant test looks beyond the local entity to the consolidated group.

That creates a professional risk.A client may have:
— A small Hong Kong subsidiary
— No significant related-party transactions
— Limited Hong Kong revenue
— A large multinational parent group

The compliance assessment must begin with the size of the entire group, not the size of the Hong Kong subsidiary.

And still be subject to Pillar Two, CbCR notification requirements and mandatory electronic filing.

Listed groups can often verify the position by reviewing consolidated revenue in the annual report.

Remember: the assessment may include both operating and non-operating income.

For Tax Partners, advisers and law firms, identifying the threshold should become part of every client onboarding and annual compliance review.

Because when the client receives a penalty, the next question may be:

“Why did none of our advisers raise this?”

08/10/2026

𝐓𝐡𝐫𝐞𝐞 𝐅𝐢𝐥𝐢𝐧𝐠𝐬, 𝐎𝐧𝐞 𝐂𝐨𝐧𝐧𝐞𝐜𝐭𝐞𝐝 𝐑𝐢𝐬𝐤

Pillar Two, CbCR and electronic Profits Tax filing should not be treated as three separate compliance projects.

The filings cross-check one another, meaning an omission or inconsistency in one may expose failures in the others.

They can cross-check one another.

A covered multinational enterprise group may need to manage:

𝐏𝐢𝐥𝐥𝐚𝐫 𝐓𝐰𝐨 𝐟𝐢𝐥𝐢𝐧𝐠
The GloBE Information Return / Hong Kong Minimum Top-up Tax filing is generally due within 15 months after the financial year-end. The first filing expected in 2026 for the fiscal years beginning on or after 1 January 2025.

𝐂𝐛𝐂𝐑 𝐧𝐨𝐭𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐫𝐞𝐩𝐨𝐫𝐭𝐢𝐧𝐠
Notification within three months and the report within 12 months after year-end.

𝐄𝐥𝐞𝐜𝐭𝐫𝐨𝐧𝐢𝐜 𝐏𝐫𝐨𝐟𝐢𝐭𝐬 𝐓𝐚𝐱 𝐟𝐢𝐥𝐢𝐧𝐠
Mandatory for years of assessment commencing on or after 1 April 2025.

Consider the inconsistency that could arise if a group completes electronic filing but does not submit its CbCR notification.

One filing may reveal the scale and structure of the group, while the absence of another filing implies that the reporting threshold was not met.

That mismatch could immediately attract attention.

Historically, a group may only have faced exposure for a missed CbCR filing.

From 2025, failing to manage all three requirements could create overlapping tax, penalty and governance consequences.

The solution is not three separate compliance calendars.

It is one coordinated group-wide process involving tax, finance, legal, systems and local management.

06/10/2026

𝐄𝐥𝐞𝐜𝐭𝐫𝐨𝐧𝐢𝐜 𝐅𝐢𝐥𝐢𝐧𝐠 𝐈𝐬 𝐍𝐨𝐭 𝐉𝐮𝐬𝐭 “𝐒𝐮𝐛𝐦𝐢𝐭𝐭𝐢𝐧𝐠 𝐎𝐧𝐥𝐢𝐧𝐞”

Mandatory electronic filing is not simply a change from paper to online submission. It represents a major increase in tax-data transparency.

In-scope entities must switch to electronic filing for years of assessment commencing on or after 1 April 2025—and there is no opt-out.

The real challenge is not pressing “submit.”It is data tagging.

Relevant data points in the Profits Tax return and specified supportin documents may need to be categorised and tagged so that the Inland Revenue Department can understand:
— What the figure represents
— Which expenditure category it belongs to
— Whether it relates to a fixed asset
— How the amount was calculated

Many companies currently still submit paper Profits Tax returns.

The transition could materially increase preparation time. A return that previously required three hours may take six hours once electronic filing and tagging are included.

But the greater issue is visibility.

Structured data gives the tax authority a clearer view of the group’s accounts and makes it easier to perform cross-checks, identify anomalies and analyse effective tax rates.

Finance teams should not leave this transition until the return deadline.

The data-mapping exercise needs to start much earlier.

30/09/2026

𝐂𝐛𝐂𝐑: 𝐅𝐢𝐥𝐢𝐧𝐠 𝐢𝐧 𝐌𝐚𝐢𝐧𝐥𝐚𝐧𝐝 𝐂𝐡𝐢𝐧𝐚 𝐌𝐚𝐲 𝐍𝐨𝐭 𝐁𝐞 𝐄𝐧𝐨𝐮𝐠𝐡

“𝐖𝐞 𝐚𝐥𝐫𝐞𝐚𝐝𝐲 𝐟𝐢𝐥𝐞𝐝 𝐭𝐡𝐞 𝐫𝐞𝐩𝐨𝐫𝐭 𝐢𝐧 𝐌𝐚𝐢𝐧𝐥𝐚𝐧𝐝 𝐂𝐡𝐢𝐧𝐚.”
𝐓𝐡𝐚𝐭 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐧𝐞𝐜𝐞𝐬𝐬𝐚𝐫𝐢𝐥𝐲 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞 𝐭𝐡𝐞 𝐇𝐨𝐧𝐠 𝐊𝐨𝐧𝐠 𝐨𝐛𝐥𝐢𝐠𝐚𝐭𝐢𝐨𝐧.

Country-by-Country Reporting has existed for several years, but many groups may still have an overlooked Hong Kong filing requirement.

Three misconceptions continue to create risk:

1. “Our Hong Kong company is small.”
The test is based on the entire group’s consolidated revenue, not the size of the Hong Kong subsidiary, and the group must meet the EUR 750 million threshold in at least two of the four preceding fiscal years

2. “The report was filed in Mainland China.”
A Hong Kong notification may still be required, even where the full report does not need to be filed again.

3. “There were no related-party transactions.”
CbCR is driven by group size, not whether the Hong Kong entity entered into related-party transactions.

The deadlines are also easy to miss:
CbCR notification: within three months after year-end
CbC report: within 12 months after year-end

For a group with a 31 December year-end, the notification deadline will generally fall around 31 March.

For the CbCR notification obligation, potential penalties can reach HKD 50,000 for one year, plus HKD 500 per day.

Where several years have been missed, the cumulative exposure can multiply significantly.

CbCR should not be treated as an isolated tax form. It should be part of the group’s annual compliance calendar.

25/09/2026

24/09/2026

𝐓𝐡𝐞 𝟏𝟓% 𝐅𝐥𝐨𝐨𝐫 𝐂𝐡𝐚𝐧𝐠𝐞𝐬 𝐭𝐡𝐞 𝐕𝐚𝐥𝐮𝐞 𝐨𝐟 𝐓𝐚𝐱 𝐂𝐨𝐧𝐜𝐞𝐬𝐬𝐢𝐨𝐧𝐬

𝐀 𝟎% 𝐭𝐚𝐱 𝐫𝐚𝐭𝐞 𝐦𝐚𝐲 𝐧𝐨 𝐥𝐨𝐧𝐠𝐞𝐫 𝐦𝐞𝐚𝐧 𝐚 𝟎% 𝐭𝐚𝐱 𝐜𝐨𝐬𝐭.

From 1 January 2025, groups within the Pillar Two threshold may be subject to a 15% global minimum tax.

That changes the economics of several traditional tax-saving arrangements.

Income previously taxed at 0% under an offshore exemption may need to be topped up to 15%.

Income already taxed at Hong Kong’s standard Profits Tax rate of 16.5% remains taxed at 16.5%.

The practical effect?
Concessions such as:
— 0% offshore treatment
— 5% R&D concessionary rates
— 0% shipping rates
— Certain value-based deductions
may provide significantly less benefit for large multinational groups.

The issue also extends beyond Hong Kong.

Low-tax entities in the BVI, Cayman Islands, Dubai or Macao may be included where they have substantive operations and profits.

For example, where an entity has already paid 9% tax in Dubai, the remaining 6% may need to be topped up to reach the 15% minimum.

The strategic conversation is therefore changing.
The question is no longer simply:
“Where can we obtain the lowest headline tax rate?”
It is:
“What is the group’s effective tax rate in each jurisdiction, and where could top-up tax arise?”

22/09/2026

𝐓𝐡𝐞 “𝐒𝐦𝐚𝐥𝐥 𝐇𝐨𝐧𝐠 𝐊𝐨𝐧𝐠 𝐒𝐮𝐛𝐬𝐢𝐝𝐢𝐚𝐫𝐲” 𝐓𝐫𝐚𝐩

Your Hong Kong company may be small.
Your Hong Kong compliance exposure may not be.

Many multinational groups assume that a Hong Kong subsidiary generating only a few million dollars in revenue falls outside the BEPS 2.0 compliance requirements.

That assumption could be costly.

The relevant test is not the revenue of the Hong Kong entity. It is the entire group’s consolidated annual revenue.

The threshold is EUR 750 million (approximately HKD 6.8 billion / RMB 6 billion), and the group must meet that threshold in at least two of the four fiscal years immediately preceding the current fiscal year.

Once the group crosses that threshold, three interconnected obligations may apply:
1. Pillar Two global minimum tax
2. Country-by-Country Reporting
3. Mandatory electronic filing of Profits Tax returns

Even non-operating income is included when assessing the revenue threshold.

This is particularly important for listed groups, state-owned enterprises and commodity-trading businesses, where consolidated revenue may exceed the threshold even though the Hong Kong operation is relatively small.

The first question for every CFO and Financial Controller should now be:
𝐇𝐚𝐬 𝐨𝐮𝐫 𝐞𝐧𝐭𝐢𝐫𝐞 𝐠𝐫𝐨𝐮𝐩 𝐞𝐱𝐜𝐞𝐞𝐝𝐞𝐝 𝐇𝐊𝐃 6.8 𝐛𝐢𝐥𝐥𝐢𝐨𝐧 𝐢𝐧 𝐜𝐨𝐧𝐬𝐨𝐥𝐢𝐝𝐚𝐭𝐞𝐝 𝐫𝐞𝐯𝐞𝐧𝐮𝐞?

Do not assess Hong Kong compliance by looking at the Hong Kong company in isolation.

15/09/2026

𝐎𝐧𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐦𝐨𝐬𝐭 𝐞𝐱𝐩𝐞𝐧𝐬𝐢𝐯𝐞 𝐚𝐬𝐬𝐮𝐦𝐩𝐭𝐢𝐨𝐧𝐬 𝐈 𝐞𝐧𝐜𝐨𝐮𝐧𝐭𝐞𝐫 𝐢𝐬:

"My employer handles my taxes, so everything must be correct."

Unfortunately, that isn't always the case.

I recently worked with a senior executive who had relocated to Hong Kong with a compensation package that included salary, bonuses, housing benefits, and share options.

He assumed his tax position was straightforward.

After reviewing his arrangements, I discovered several deductions had never been claimed and parts of his compensation package could have been structured more efficiently.

The result was a significant reduction in his annual tax liability without changing his overall remuneration.

What surprised him most was that he wasn't doing anything wrong.

He simply didn't know what opportunities were available under the tax rules.

Many high earners focus entirely on what they earn.

I encourage them to focus on how their income is structured.

Housing benefits, share schemes, family allowances, offshore income claims, and year-end planning decisions can all influence the final outcome.

Sometimes the difference isn't your salary.It's your understanding of the rules.

10/09/2026

𝐀 𝐩𝐫𝐨𝐟𝐢𝐭𝐚𝐛𝐥𝐞 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐜𝐚𝐧 𝐬𝐭𝐢𝐥𝐥 𝐛𝐞 𝐭𝐚𝐱 𝐢𝐧𝐞𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐭.

In fact, some of the most successful companies I advise are often the ones with the greatest opportunity for improvement.

Not because they've done anything wrong.

Because their businesses have evolved faster than their structures.

A setup that worked perfectly five years ago may no longer be the right fit today.

New shareholders.

International expansion.

Additional business lines.

Cross-border transactions.

All of these can change the tax profile of a company.

The challenge is that many businesses review their tax position only when filing deadlines arrive.

By then, most of the important decisions have already been made.

The best tax planning usually happens long before a return is filed.

08/09/2026

𝐎𝐧𝐞 𝐦𝐢𝐬𝐭𝐚𝐤𝐞 𝐈 𝐬𝐞𝐞 𝐫𝐞𝐩𝐞𝐚𝐭𝐞𝐝𝐥𝐲 𝐝𝐮𝐫𝐢𝐧𝐠 𝐈𝐏𝐎 𝐩𝐫𝐞𝐩𝐚𝐫𝐚𝐭𝐢𝐨𝐧 𝐢𝐬 𝐭𝐫𝐞𝐚𝐭𝐢𝐧𝐠 𝐭𝐚𝐱 𝐚𝐬 𝐬𝐨𝐦𝐞𝐭𝐡𝐢𝐧𝐠 𝐭𝐡𝐚𝐭 𝐜𝐚𝐧 𝐛𝐞 𝐚𝐝𝐝𝐫𝐞𝐬𝐬𝐞𝐝 𝐥𝐚𝐭𝐞𝐫.

It usually can't.

By the time a company is approaching its listing date, many of the important structural decisions have already been made. Changing them at that stage is often expensive, disruptive, or simply impossible.

I recently reviewed a growth company preparing for an IPO. Over the years, the business had accumulated multiple holding entities, investor arrangements, and shareholder structures across different jurisdictions.

None of those decisions seemed problematic when they were made.

But viewed through the lens of a public company, they created unnecessary tax complexity for both the business and its shareholders.

Fortunately, there was still enough time to simplify several areas before listing.

The lesson was simple.

An IPO is not just a capital markets event.

It's also one of the few opportunities to review your tax structure before it becomes subject to public scrutiny, ongoing disclosure obligations, and increased regulatory attention.

The companies that start this process early generally have fewer surprises after listing.

The ones that don't often spend years dealing with issues that could have been addressed before going public.