Emerging Markets Rates and Currencies Handbook

17 Citi | Emerging Markets Currencies Handbook 2021 Hong Kong Item Inter-Co Debt Offshore Bank Loans Offshore Local Borrowing Derivatives Equity W/H Tax No WHT Treaties provide for a maximum WHT rate on interest should it be imposed in the future N/A No WHT Treaties provide for a maximum WHT rate on interest should it be imposed in the future Deductibility of interests There are no thin cap rules in Hong Kong but there are specific interest deductibility rules that apply Subject to stringent rules designed to guard against loan arrangements with an intention to avoid Hong Kong profits taxes N/A N/A Deductibility of FX losses Deductibility of FX losses depends on the underlying transactions • Foreign exchange losses arising from capital transactions: Non-deductible • Foreign exchange losses arising from revenue transactions: Deductible • Unrealized losses arising from financial instruments that are Hong Kong sourced, revenue in nature, recognized in the P&L and are specifically impaired, are deductible if an irrevocable election is made to file the profits tax return in accordance with financial statements prepared under IFRS 9 Other taxes, duties N/A N/A N/A N/A N/A Comments N/A N/A N/A N/A N/A Note: Citigroup Inc. and any of its affiliates do not provide accounting, tax, or legal advice. Please seek advice from a relevant licensed advisor. Source: Relevant legislation, publicly available sources. Subsidiary Funding — Tax Consideration Tax Summary — Hong Kong (SAR)