July 2018 - The Transfer Pricing and BEPS Legislation Passed in Hong Kong
The legislation to (1) introduce the statutory transfer pricing regime, and (2) implement the various minimum standards under the OECD’s Base Erosion and Profit Shifting (“BEPS”) Action Plans, Inland Revenue (Amendment) (No.6) Ordinance 2018 ( the “Bill”) was passed by the Legislative Council on 4 July 2018. Please refer to our February and March 2018 Hong Kong Tax News on the background leading to the then draft legislation (the “Draft Bill”).
In the area of Transfer Pricing (“TP”), the Bill formally introduces a TP regulatory regime and TP documentation requirement into the Hong Kong tax legislation. The Bill also implements the various minimum standards under the OECD’s BEPS Action Plans in Hong Kong. Further to its joining of the BEPS Inclusive Framework of the OECD in June 2016, Hong Kong is obliged to introduce legislations to implement the various minimum standards under the OECD’s BEPS Action Plans.
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