What are the relevant statutory provisions?

A charity is exempt from tax under section 88 of the IRO. The general tax exemption contained in section 88 is subject to conditions.

•  Proviso to section 88 of the IRO provides that if a charity carries on a trade or business, the profits from such trade or business are exempt from profits tax only if:

(a) the profits are applied solely for charitable purposes; and

(b) the profits are not expended substantially outside Hong Kong; and

(c) either –

(i) the trade or business is exercised in the course of the actual carrying out of the expressed objects of the charity; or

(ii) the work in connection with the trade or business is mainly carried on by persons for whose benefit such charity is established.

How do to recognise a charity as tax-exempt?

Any organisation wishing to seek recognition as a charity exempt from tax under section 88 of the IRO should complete an application form and provide the documents specified therein to the Department.