Q：
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What kind of payments are subject to withholding tax in Hong Kong?
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A：
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Payments subject to withholding tax are the following:
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Royalties and license fees made to non-residents
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Payments received for the performance in Hong Kong of non-resident entertainers or sportsmen
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Q：
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Which type of royalties and license fees are subject to withholding tax?
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A：
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Royalties and license fees subject to withholding tax include:
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Payments for the exhibition or use in Hong Kong of cinematography or television film or tape, sound recording or their connected advertising materials [section 15(1)(a)].
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Payments for the use, or the right to the use, in Hong Kong of any patent, design, trade mark, copyright material, layout-design (topography) of an integrated circuit, performer’s right, plant variety right, secret process or formula [section 15(1)(b)].
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Payments for the use, or the right to the use, outside Hong Kong when such sums are deductible in ascertaining the Hong Kong persons’ assessable profits, of any patent, design, trade mark, copyright material, layout-design (topography) of an integrated circuit, performer’s right, plant variety right, secret process or formula [section 15(1)(ba)].
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Payments for an assignment of, or agreement to assign, a performer’s right in relation to a performance given by the performer in Hong Kong [section 15(1)(bb)].
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Q：
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What will be the assessable profits for royalty and license fees made to non-residents?
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A：
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In respect of a sum specified in section 15(1)(a), (b) or (ba), assessable profits are deemed to be 30% of the sum received or accrued except where the intellectual property was previously owned by a person carrying on a trade, profession or business in Hong Kong and the sum paid or accrues to an “associate”. In the latter case, 100% will be taken as the assessable profits.
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Q：
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What kind of performance in Hong Kong given by a non-resident entertainer or sportsman are subject to withholding tax?
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A：
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Such performance includes:
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Any appearance of the entertainer or sportsman by way of or in connection with the promotion of a commercial occasion or event; and
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Any participation by the entertainer or sportsman in or for sound recording, films, videos, radio, television or other similar transmissions whether live or recorded.
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Q：
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What will be the assessable profits for the sums received by non-resident entertainers or sportsmen for performance in Hong Kong?
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A：
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Inland Revenue Department advised Hong Kong promoters to withhold tax on the basis that assessable profits represent two-third of the gross amount received by the entertainer or sportsman.
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FAQ
