The Hong Kong Inland Revenue Department (IRD) issued an advance ruling (Case No. 34) on 10 August 2007 stating that profits derived from an overseas branch of a Hong Kong distribution company are not chargeable to profits tax in Hong Kong. The ruling applies from the year of assessment 2007/2008 onwards. The details of the arrangement are summarized below. The company incorporated in Hong Kong is primarily engaged in the distribution of products of a group of companies in Hong Kong and Asia, which are manufactured by the overseas factories of the group. The company intends to set up a...