A Hong Kong entity of a group engaging in transactions with associated entities is required to prepare a Master File and a Local File, subject to certain exemptions.
To be specific, if a Hong Kong company reaches the following Criteria (A) and (B), it is required to prepare a Master File and a Local File for submission to the Inland Revenue Department upon request:
Criteria (A): Based on size of business | Threshold (per financial year) |
|---|---|
(i) Total annual revenue | > HK$400 million |
(ii) Total assets | > HK$300 million |
(iii) Employees | > 100 |
Criteria (B): Based on related party transactions | Threshold (per financial year) |
|---|---|
(i) Transfers of properties | > HK$220 million |
(ii) Transactions in financial assets | > HK$110 million |
(iii) Transfers of intangibles | > HK$110 million |
(iv) Any other transactions | > HK$44 million |
For details, please visit https://www.ird.gov.hk/eng/tax/bus_tp.htm or connect with Us.
