TIHK CTA Paper 2 Practice Questions - TIHK CTA Paper 2 - Hong Kong Tax Exam - TIHK CTA Paper 2 Practice Questions - TIHK CTA Paper 2

Question 1

Under Section 14 of the Inland Revenue Ordinance (IRO), which condition MUST be satisfied for a person to be subject to Hong Kong Profits Tax?

Must be a HK resident company Must carry on a trade, profession, or business in HK, with profits arising in or derived from HK from that trade/profession/business Must have a physical office in HK with 5 employees Worldwide profits must exceed HK$2,000,000

Correct Answer:

Must carry on a trade, profession, or business in HK, with profits arising in or derived from HK from that trade/profession/business

Question 2

A HK trading company negotiates and concludes purchase and sales contracts in HK for goods shipped directly from Taiwan to Japan. Where are the trading profits derived?

Taiwan Japan Hong Kong Offshore (exempt)

Correct Answer:

Hong Kong

Question 3

Company A reports assessable profits of HK$3,500,000 for 2025/26. It claims two-tiered Profits Tax rates. What is its total Profits Tax liability?

HK$577,500 HK$412,500 HK$288,750 HK$511,500

Correct Answer:

HK$412,500

Question 4

Which of the following expenses is specifically NON-DEDUCTIBLE under Section 17 of the IRO?

Trade association subscriptions Domestic or private expenses, and capital expenditure or loss of capital Bad debts previously included as assessable profits Mandatory MPF contributions for employees

Correct Answer:

Domestic or private expenses, and capital expenditure or loss of capital

Question 5

Under Section 16(1)(a) and Section 16(2), what is required for interest expense to be deductible by a HK business?

Must be paid to a tax-exempt charity Borrowed for producing assessable profits and satisfy at least one Section 16(2) condition (e.g., lender chargeable to HK Profits Tax) Loan secured by offshore real property Interest rate at least 2% above HIBOR

Correct Answer:

Borrowed for producing assessable profits and satisfy at least one Section 16(2) condition (e.g., lender chargeable to HK Profits Tax)

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Prepare with the TIHK CTA Paper 2 Practice Questions - TIHK CTA Paper 2 - Hong Kong Tax Exam practice quiz. This question bank includes 21 questions covering hong, kong, profits, section, and salaries. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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TIHK CTA Paper 2 Practice Questions - TIHK CTA Paper 2 - Hong Kong Tax Exam

This practice set contains 21 questions from the matching question bank and focuses on hong, kong, profits, section, and salaries. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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TIHK CTA Paper 2 Practice Questions - TIHK CTA Paper 2 - Hong Kong Tax Exam

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