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Finance Secretary Paul Chan delivered the 2022-2023 Hong Kong budget on Wednesday, 23 February. We have summarized the five most important budget updates for you and your business in Hong Kong:
- Additional tax cuts
The government will reduce profits tax, salaries tax, and tax under personal assessment for the year of assessment 2021-22 by as much as 100%, subject to a ceiling of HKD 10,000 per case. Please note that if you are separately chargeable to salaries tax and profits tax, you can enjoy tax reduction under each of the tax types.
- Business registration fees waived
Business registration fees will be waived for one year, starting from 1 April 2022 to 31 March 2023. Businesses that have already paid the registration fees for the Waiver Period (such as those that hold a 3-year registration certificate) will be refunded the relevant registration fees.
- SME tenants cannot be penalized for late rent
The Government has introduced a new measure to allow SME tenants renting under Hong Kong’s property developers to delay payments for up to six months. This is subject to Legislative Council approval. Once approved, developers will not be allowed to chase tenants for rent.
- SME loan scheme extended
The existing Special 100% Loan Guarantee Scheme (i.e. guarantee coverage of 50%, 60% or 70% from the Government to the credit facilities for small and medium enterprises – SMEs – to secure their loans from lending institutions and banks) will be extended until June 2023. Eligible companies will be allowed to borrow up to HK$9 million, instead of HK$6 million, and repay the interest (not the principal sum) for a maximum of 10 years, instead of eight.
- Financial support for individuals
There will be 100% reduction in 2021/22 salaries tax for individuals, capped at HK$10,000, with other support measures including rate concessions for residential properties, electricity subsidies for rate payers, and tax assessment reduction for renting homes, capped at HK$100,000 per year.
Moreover, the pandemic-relief personal loan guarantee scheme will be extended to April 2023, with the maximum amount increased from six to nine times that of the applicant’s monthly income, capped at HK$100,000.
To boost the economy, permanent residents and new immigrants aged 18 or above will be given HK$10,000 consumption vouchers in two instalments, with the first instalment of HK$5,000 to be handed out in April.
If you require more information about the Budget Policy 2022/23 of the Hong Kong Government or if you have other tax issues in the region, please do not hesitate to contact us at contact@orbis-alliance.com.