Head of Tax, Travis Benjamin was recently featured in the Asian Investor in an article commenting on how hedge fund managers in Hong Kong should consider litigating against the Inland Revenue Department (IRD) in cases regarding their policies on taxation of remuneration.
Travis commented that the IRD’s focus on transfer-pricing policies is “technically irrelevant” in the eyes of the law and therefore the industry could consider litigating. As there are no comprehensive tax treaties between Hong Kong and either the Caymans or the British Virgin Islands, arm’s-length pricing should not apply to fund firms in the city when dealing with managers in those two offshore locations, he argued.
“The inconvenient truth of the matter is that there is no legal basis for the IRD’s approach or for its assessment position,” Travis said.
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