Ways to Obtain Tax Exemption Status for Charities in Hong KongPosted by HongKong Company Registration on March 4th, 2022 Charitable institutions with tax exemption status accorded by section 88 of the Inland Revenue Ordinance (Cap. 112) enjoy exemptions of stamp duty on transfer of any immovable property or Hong Kong stock, business registration fee, and profits tax on all their income which is solely applied for charitable purposes. Individual and business donors can also claim tax deduction for their approved charitable donation to these tax-exempt charities. Process of tax exemption status application in Hong Kong1. Applying for the Tax Exemption StatusIn order to successfully acquire tax exemption status, the charity organisation is required to submit an application letter seeking recognition of tax exemption status to the Inland Revenue Department (the “IRD”), as well as preparing the following documents. For established organisations:
For unestablished organisations:
2. Requirements of the Governing instrumentThe Articles of Association must cover the following clauses for IRD’s review and approval:
3. Duties of Tax-Exempt CharitiesIn general, it might take up to 4 months for IRD to issue a final written notice confirming your application status. If the Department gives the green light to the exemption, the tax-exempt charities have to carry out the duty of submitting accounts and annual reports in order to review whether the charity is still charitable and aligned with the governing instrument. In addition, it is necessary to notify the Department of any change in circumstances such as changing of the charity’s correspondence address or alteration to the Articles of Association. If you aspire to make a contribution to society by setting up a charity, opening a company limited by guarantee could be the way. A licensed corporate service provider provides the best solutions to you, and basically all you need to know from the governing instrument to the tax implications. This article has been originally posted at Hong Kong Company Registration. Like it? Share it!More by this author |