A ruling will only be given for a seriously contemplated arrangement with full particulars set out. The ruling is binding on the Commissioner of Inland Revenue Department and is valid within the period stated in the ruling. However, the ruling on any specific case should not be relied upon for other cases.

According to Part 1 of Schedule 10 of Hong Kong Inland Revenue Ordinance (“IRO”) , advance ruling will not be provided in certain subject matters, grounds or circumstances. For example, the matter on which a ruling is sought relates to the imposition or remission of a penalty, whether a tax return or other information provided by a taxpayer is correct or not, etc.

An objection can only be lodged after a taxpayer has received the relevant tax assessment form the Inland Revenue Department (“IRD”) while an application for an advance ruling should be submitted early in the year of assessment to which the proposed ruling relates.

The fees payable in respect of an application for a ruling is specified under Part 2 of Schedule 10 of the IRO are as follows:

(i) for a ruling on whether profits are to be treated as chargeable to profits tax under section 14 of the IRO as arising in or derived from Hong Kong	HK$45,000
(ii) for a ruling on whether remuneration is to be treated as chargeable to salaries tax under section 9A of the IRO	HK$15,000
(iii) for any other ruling	HK$15,000

(Note: if the time spent by IRD in respect of the ruling procedures exceeds the expected time, additional fees may be imposed.)

As you can see from the above, the application fee paid to IRD for an advance ruling involves a considerable amount of money. In addition, you may have to incur additional fees if you would like to appoint a professional tax agent to process such application. It may not be cost-effective to get an advance ruling on a tax arrangement that only involves a small sum of money.

- https://www.ird.gov.hk/eng/pol/aru.htm
- https://www.ird.gov.hk/eng/ppr/arc.htm
- https://www.ird.gov.hk/eng/pdf/dipn31.pdf