Tax credit in respect of profits attributed to the permanent establishment in the Mainland
Profits attributed to the permanent establishment in the Mainland
Tax payable Assessable profits
Actual tax credit allowed is to be restricted to the actual tax paid in the Mainland, i.e. $1,500
The computation of tax credit for royalties received by Hong Kong
Hong Kong resident Company D prepares its accounts annually for
Such royalties are income arising expenses allowable for deduction
in Hong Kong. The under the Ordinance
amount of (excluding
the tax withheld) is $70,000.
Company D does not have any other
income or expenses during the relevant year.
- Tax paid in the Mainland
Assessable income for the year of assessment 2007/08 $(90,000 – 70,000)
Tax payable before allowance of tax credit (the tax rate for the year 2007/08 is 17.5%) Less: Tax credit