Recently, in the accounting, auditing and tax declaration of Hong Kong companies, one of our clients borrowed money from companies and individuals in his Hong Kong company's accounts. In fact, borrowing money is also a very common way to raise funds in the company's daily business activities.
Recently, I worked in Hong Kong company to make accounts.Hong Kong corporate auditIn the tax declaration of Hong Kong company, one of our clients has borrowed money from companies and individuals in his Hong Kong company accounts. In fact, borrowing money in the daily operation of the company is also a way to raise funds, which is very common.
The company in Hong Kong does the accounting andHong Kong corporate auditIs the interest paid on loans to companies and individuals tax deductible in Hong Kong Profits Tax? This mainly shows whether the borrower has paid profits tax in Hong Kong. For example, the lender is a Hong Kong company and a Hong Kong individual. The interest received by such people needs to be taxed in Hong Kong, and the corresponding borrower can offset the tax on the interest payment. If the lender is a company or individual outside Hong Kong and has not paid profits tax in Hong Kong, the corresponding interest expense paid by the borrower is not tax deductible.
Recently, one of our clients paid interest on loans to companies in Hong Kong and to companies and individuals outside Hong Kong. In the calculation of profits tax, the auditor only adjusted the tax deduction for interest expense paid to companies in Hong Kong and loan interest paid to companies and individuals outside Hong Kong, which was not deductible for profits tax.So the interest expense on the loan needs to be identified to calculate the profits tax deduction.
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