Hong Kong Taxation

AB Ltd, a Hong Kong resident company, is organizing a pop music concert to be staged in Hong Kong in January 2019. AB Ltd has appointed another Hong Kong resident company, CD Ltd, to procure performances by various overseas artists at the concert. CD Ltd has entered into an agreement with Mr. X, the US resident manager of a US resident pop star, for the performance of that pop star at the concert for a fee of $2,000,000. AB Ltd will pay $2,200,000 to CD Ltd, which will then pay $2,000,000 to Mr. X. The fee payable by Mr. X to the US pop star is $1,800,000.

Required: Explain the withholding obligations, if any, imposed under the Inland Revenue Ordinance on each of the parties concerned and compute, with explanations, the amount of tax to be withheld. (8 marks)