On Wednesday, 26 February – Financial Secretary Paul Chan Mo-po announced Hong Kong budget initiatives for the 2020/21 fiscal year. This plan is set out in the expectation of riding out the country’s economy downturn caused by Covid-19 epidemic and other challenges, at the same time offer more opportunities for Hong Kong enterprises to deal with the hardship.
The plan highlights a comprehensive picture of Hong Kong’s economy, plus proposals for taxation measures that enterprises should take into account. So, what are the key points to note?
NEW RELIEF MEASURES
- To carry out counter-cyclical measures of a large scale involving more than HK$120 billion.
- 100% government guaranteed low-interest loan of up to HK$2 million per case to support SMEs, with repayment period up to 3 years and option to made only interest payments in the first 6 months.
- A one-off reduction of profits tax for the year of assessment 2019/20 (by 100%), subject to a ceiling of $20,000.
- Waiver of the business registration fees from 1 April 2020 to 31 March 2021. Click here for detail.
- Waiver of the registration fees for all annual returns charged by the Companies Registry for two years, other than late delivery.
- Waiver of the rates for non-domestic properties for 4 quarters of 2020-21 with a cap of $5,000 per quarter in the first two quarters and $1,500 per quarter in the remainings for each rateable non-domestic property.
- Propose to provide profit tax concessions for ship leasing business and marine insurance business.
- A 100% reduction of salaries tax and tax under personal assessment for the YA 2019/20, subject to a ceiling of $20,000.
- Waiver of rates with regard to residential properties for 4 quarters of 2020-21, subject to a cap of $1,500 per quarter for each rateable property.
Propose to waive stamp duty on stock transfers paid by the Exchange Traded Fund (ETF) market makers to create and redeem ETF units listed in Hong Kong.
Note that these measures may require legislative amendments before implemented. The proposed tax reduction will only be applicable to the final tax for the YA 2019/20, but not to the provisional tax of the same year.
For further details on Hong Kong budget plan for the 2020-21, read HERE.
Should you have any concerns regarding setting up a business in Hong Kong, do not hesitate to drop us a chat message or send email via email@example.com.