According to Section 2 of the Inland Revenue Ordinance, “Approved charitable donation” means a donation of money to any charitable institution or trust of a public character, which is exempt from tax under section 88 of the Inland Revenue Ordinance, or to the Government, for charitable purposes. We have experience in helping clients who wish to have its organization granted as a charitable entity and exempted from profits tax in Hong Kong.
Inland Revenue Department has issued an information pamphlet entitled “A tax guide for charitable institutions and trusts of a public character” for reference by the public. Below are the key summary for your easy reference before you decide to apply for your company to be a charitable organization to exempt from profits tax in Hong Kong:
For practical purposes, the judgement of Lord MacNaghten in the case of I T Special Commissioners v Pemsel (3 TC 53) is regarded as an authoritative summary of the purposes that may be accepted as charitable. These are: –
- relief of poverty;
- advancement of education;
- advancement of religion; and
- other purpose of a charitable nature beneficial to the community in Hong Kong.