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How much is UK Corporation Tax on foreign dividends received…

Hi Tony,How much is UK...
Hi Tony,How much is UK Corporation Tax on foreign dividends received from Honk Kong subsidiary?The recipient of such dividends is UK based Limited company. Are these foreign dividends exempt for a "small company"?
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Answered in 16 minutes by:
11/13/2017
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 4,825
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

The UK corporate tax rate is currently 19%, which took effect in April, 2017.

Dividends received by the UK holding company from other UK companies or from overseas companies should benefit from an exemption from corporation tax, called the dividend exemption. If available, this means that the UK holding company does not have to pay corporation tax on the dividends it receives.

Whether the UK holding company gets the benefit of the dividend exemption will depend on whether it is a 'small' company. Generally a company will be a small company if it has fewer than 50 employees and its annual turnover or annual balance sheet is less than €10 million.

The following link contains additional information you will find helpful:

https://www.out-law.com/topics/tax/international-tax-/tax-issues-for-uk-holding-companies/

Please let me know if I can assist you further.

Thank you and best regards,

Barb

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Customer reply replied 3 months ago
Hi Barbara,
My question was if Hong Kong dividends are exempt or not for uk corporation tax? I am aware of general tax rates but it is not very clear about foreign dividends received specifically from HK. I also mentioned that the company qualified as "small" so I just need a clear answer for clear question on "foreign dividends taxation for small companies". There are lots of links in the internet but reading them is very confusing.Best regards,

I apologize if I was not clear in my response.

The Hong Kong dividends are exempt from taxation for the UK corporation if the corporation meets the requirements of a "small" company, which you indicate that it does.

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Customer reply replied 3 months ago
Thank you

My pleasure.

If I have answered your question, please take a moment to rate my answer since that is the only way I receive credit for answering you.

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Just following up with you to see if you have any other questions. If so, please let me know so I can continue to assist you.

Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 4,825
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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