Departmental Interpretation and Practice Note 45

The Hong Kong Inland Revenue Department recently issued Departmental Interpretation and Practice Notes No. 45, which sets out IRD views and practices on granting relief from double taxation due to a transfer pricing or profit reallocation adjustments under an applicable treaty. In addition to presenting the background on transfer pricing in Hong Kong, the author considers the impact of DIPN 45 on Hong Kong taxpayers and its wider messages.