⚠ Logistics Offshore Income Often Under-Claimed
Freight forwarders and 3PL operators that treat all logistics income as HK-source are frequently over-paying tax. Cross-border freight income, overseas warehousing revenue, and transhipment income may have significant offshore components that can legitimately reduce HK tax.
Common Challenges
Cross-Border Income Apportionment
Cross-border freight income earned from HK to Mainland or internationally requires apportionment between HK-source and offshore-source income based on where services are performed.
⚠ Risk: All income taxed in HK → significant over-payment
Warehouse Depreciation & Allowances
Warehouse racking systems, forklifts, conveyor systems, and automated picking equipment all qualify for capital allowances. Many operators under-claim.
⚠ Risk: Under-claiming equipment allowances → excess annual tax
Port Handling vs Freight Income
Port handling fees, container terminal income, and HK customs brokerage are all HK-source. Cross-border trucking income is partially offshore. These must be separated.
⚠ Risk: Mixing income types → loss of offshore exemption
Vehicle Fleet Allowances
Commercial vehicles used in the logistics business — trucks, vans, forklifts — attract significant capital allowances that are frequently under-claimed.
⚠ Risk: Vehicles treated as expenses → allowances missed entirely
Who Is This For?
Freight forwarders
Air freight, sea freight, and multimodal freight forwarding companies.
Third-party logistics (3PL)
Integrated 3PL providers offering warehousing, distribution, and value-added services.
Customs brokers
Licensed customs brokers and trade compliance service providers.
Last-mile delivery companies
Local courier, parcel delivery, and last-mile logistics operators.
What We Do
Cross-Border Income Apportionment
Establish IRD-defensible apportionment methodology for cross-border logistics income.
Route analysis and service activity documentation
Fleet & Equipment Allowances
Maximise capital allowances on commercial vehicles, warehouse equipment, and logistics technology.
Fleet register review and P&M pool calculation
Logistics Profits Tax Return
Prepare BIR51 with cross-border apportionment schedules, offshore income claims, and equipment allowances.
Multi-modal income analysis included
Offshore Income Claim
Identify and document qualifying offshore logistics income to reduce HK profits tax exposure.
Activity analysis and offshore claim preparation
How It Works
Operations Review
2-3 daysAnalyse your logistics operations, trade routes, revenue streams, and fleet/equipment.
Income Apportionment Analysis
2-3 daysDetermine HK vs offshore sourcing for each revenue stream and establish defensible apportionment.
Return Preparation
4-7 daysPrepare profits tax return with all logistics-specific schedules and claims.
Annual Tax Planning
AnnualFleet expansion planning, depreciation optimisation, and provisional tax management.
Case Studies
Cross-border freight forwarder — 35 staff
- •Annual freight revenue HKD 38M
- •Offshore income apportionment established
- •Fleet of 12 trucks — allowances maximised
- •Warehouse fit-out claims filed
“Excellent understanding of logistics operations and cross-border income tax rules.”
3PL operator — 3 warehouses, 60 staff
- •Annual warehousing revenue HKD 28M
- •Racking and conveyor allowances claimed
- •Value-added service income correctly classified
- •Cross-border trucking income apportioned
“They identified HKD 690K in savings we'd been missing for years.”
Frequently Asked Questions
How is cross-border freight income apportioned for HK profits tax?
The IRD applies the "operations test" to determine source — income is sourced where the profit-generating activities occur. For cross-border freight, a common approach is to apportion based on the proportion of the journey/service performed in HK vs overseas. For example, a HK-to-Shanghai shipment where the HK-side activities (booking, customs, port handling) represent 40% of the service may have 40% HK-source income. IRD Practice Note 21 provides guidance.
Do commercial vehicles qualify for capital allowances in Hong Kong?
Yes. Commercial vehicles used in a trade or business qualify as plant & machinery for capital allowance purposes under the IRO. This includes trucks, vans, refrigerated vehicles, forklifts, and cargo-handling vehicles. The standard rates apply: 60% initial allowance in the year of acquisition, plus 30% annual allowance on the reducing balance. Private cars are specifically excluded from capital allowances.
How should warehousing revenue be treated for tax?
Warehouse storage fees for goods stored in Hong Kong are HK-source income and fully taxable. Fees for storage of goods in transit may have an offshore element if the goods are not cleared through HK customs. Value-added warehousing services (labelling, kitting, quality control) performed in HK are HK-source income. The key is to document where each service activity actually occurs.
Are customs brokerage fees taxable in Hong Kong?
Yes. Customs brokerage fees for clearing goods through Hong Kong customs are HK-source income — the service is performed in HK — and are fully taxable as profits tax. This applies even if the goods are owned by overseas clients. Disbursements (duties, taxes paid on behalf of clients) are not income but should be correctly treated as pass-through items.
Can logistics companies claim deductions for warehouse lease costs?
Yes. Warehouse lease payments (rent) are deductible business expenses. For logistics companies in Hong Kong's industrial areas (Kwai Chung, Tsuen Wan, Tuen Mun), warehouse rent is typically a major expense. Lease incentives (rent-free periods, landlord contributions) must be spread over the lease term. Fit-out costs qualify for capital allowances or s.16C renovation deductions.
需要專業稅務服務？
立即聯繫我們的專業團隊，獲取免費諮詢和報價。我們為個人及企業提供全面的香港稅務服務。
免費諮詢
填寫以下表格，我們的專家團隊將在 24 小時內與您聯繫。