The Inland Revenue (Amendment) (No. 6) Ordinance 2018 was gazetted today.

It implements the minimum standards of the Base Erosion & Profit Shifting package promoted by the Organisation for Economic Co-operation & Development and codifies the transfer pricing principles into the ordinance.

The Government said the amendment aligns the Inland Revenue Ordinance with the latest guidance enacted by the organisation.

In meeting the international requirements, the Government said it also seeks to minimise the compliance burden for the business sector.

It added the codification of the transfer pricing rules provides greater clarity and certainty for taxpayers, and the long-established territorial source principle of taxation will continue to apply to determine the chargeability of income or profits to Hong Kong tax.

The department will provide further implementation guidance to facilitate enterprises' compliance with the new requirements.