Hong Kong Court rules sub-licensing income is Hong Kong-sourced taxable income

11 January 2024|Tax Alerts, Information Reporting, Legislation & Policy, National/Federal Taxation|Hong Kong

Hong Kong's Court of First Instance (CFI) recently handed down a decision¹ that ruled royalties from sub-licensing certain trademarks for use in Japan to be Hong Kong-sourced income and taxable in Hong Kong.
Activities performed by agents in Japan under the joint venture arrangement are not attributable to the Hong Kong taxpayer when determining its source of profits if they are not directly linked to the profit-producing activities of the taxpayer.

The taxpayer was incorporated in Hong Kong…

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