Mainland to take a closer look at tax of foreign firms.

(From South China Morning Post)

Byline: taxation Toh Han Shih and Dikky Sinn

The taxable income of Hong Kong firms operating on the mainland is expected to come under greater scrutiny, according to PricewaterhouseCoopers.

It is believed that "in the near future", the State Administration of Taxation will sign a new tax agreement with the Inland Revenue Department requiring more stringent exchange of information, PwC senior manager Philip Hung said.

"The Chinese government will know how much profits Hong Kong companies earn and vice versa with the Hong Kong government," he said.

Mainland tax authorities suspect many foreign firms …