Wallet company: a company is not a tax shortcut

A wallet company is a term used in a tax context, not a separate form of incorporation in the Companies Registrar.

When a person's personal activity yields income through a small company, Section 62A of the Income Tax Ordinance may, under certain conditions, attribute the income to the individual. The rules were expanded from 2025 and there are several scenarios, conditions and exceptions. Not every small company, single-owner company or a company with one client is automatically considered a wallet company. The classification should not be inferred solely from the name or an example. This is not a recommended method for tax reduction; a practical examination requires a professional and the up-to-date statutory wording.

A fictional person provides services through a company under his control. The mere issuance of an invoice in the company's name does not prove that the income will be taxed only at the company level; an examination of the rules and circumstances is required.

Explain why the invoicing alone does not determine who is liable for tax.