New Hong Kong Transfer Pricing Regime 2019
In July 2018, Hong Kong introduced the most significant change to its transfer pricing rules in decades. The new law codifies the OECD arm's length principle and affirms Hong Kong's commitment to implement the comprehensive Base Erosion and Profit Shifting (BEPS) package. These changes are now effective and multinational businesses with a presence in Hong Kong should not delay in considering how these rules apply to their fact pattern and what actions they need to take.
In this video, Deloitte provides an overview of the key elements to the new regime including new master file and local file documentation requirements, permanent establishment issues, country-by-country reporting and grandfathering provisions. The legislation is complex and contains uncertainties which will be addressed in new Departmental Interpretation and Practice Notes to be released shortly by the Inland Revenue Department.