Tax questions on a share-dealing account in HK

We are interested in investing in the Hong Kong stockmarket. Can you please help answer 3 tax questions:-

(1) I understand that generally there is no capital gains tax or tax on dividends in HK, however is there any profit tax on trading infrequently in HK listed shares by an investment company?
When answering this question please note that we will not be active professional traders and only buying/selling shares infrequently once every 3 months, i.e. not active traders.

(2) If only US/European foreign listed shares (non-territorial) are bought in HK through a HK stockbroker, will any HK tax need paying or a HK tax return need filing?
I assume the share contract note will be deemed to have been executed outside the territory of HK in this instance (e.g. on the NASDAQ exchange)?

(3) If a non-resident company only has a Hong Kong share-dealing account (and no other trade/investments or office in HK), will any HK tax returns need to be filed?

Many thanks

Nathan Adams

It is not a "yes" or "no" question. There is no easy answer for this. However, here are something you should know:

1. Yes, HK has no capital gain tax or tax on dividends (from HK incorporated companies in general)
2. If you have an investment company (assumed to be a HK incorporated limited company), you have to file tax return (annually).
3. Whether profit from "trading" of stocks is a capital or trading gain is a matter to be determined based on facts and circumstances. Capital gain is not taxable while trading gain is taxable.
4. Frequency (3 months or 3 days) is only one factor to be considered in determining the nature of the gain (i.e. capital or trading gain).
5. Other factors to consider include where is the source of funds/ finance for the "trading" of stock? where the decision maker is located?

I would suggest that you obtain professional advice before making any decision.