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The Hong Kong government proposed a series of tax measures on 15 August 2019 to support enterprises to preserve employment and stabilize the economy and relieve people’s financial burdens considering the Hong Kong economy is facing significant downward pressure.
100% of the 2018-19 profits tax, salaries tax and tax under personal assessment would be waived subject to a maximum of HK$20,000 per case.
For profits tax, the ceiling of tax reduction is applied to each business. A one-off tax reduction by 100% would be given, at a cap of HK$20,000. In other words, companies which are normally required to pay no more than HK$20,000 of profits tax would not be required to pay any profits tax for 2018/2019.
The profits tax rates however remain unchanged: 8.25 on assessable profits up to HK$2,000,000 and 16.5% on any part of assessable profits over HK$2,000,000.
As stated, individual taxpayers could also enjoy tax reduction. Similarly, salaries tax and tax under personal assessment would be reduced by 100%, capped at HK$20,000.
Note that the proposed tax reduction is to reduce the 2018/19 final tax and will not affect the calculation of the provisional tax for 2019/20. The provisional tax paid for 2018/19 will be used to offset the final tax for 2018/19 after tax reduction as well as the provisional tax for 2019/20 and if there is still a balance, it will be refunded.
Certain government fees and charges would be waived for 12 months.
27 groups of government fees and charges would be waived to benefit a wide range of sectors from maritime, logistics, retail, catering, tourism, construction, to agriculture and fisheries. For example, travel agent license fees and fees for new issue or renewal of a liquor licence would be waived. Click here for the full list.
HK$1 billion would be injected into 2 funds dedicated on sales and marketing to support enterprises in exploring business opportunities.
Note that these measures as ‘tax relief” would mostly benefit very small businesses and individuals residing in Hong Kong.
Keep in mind the implementation of the proposed measures are subject to the final approval from the Legislative Council.
For further details from government website, please click here.
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