|Hong Kong Mulls New Tax Breaks For SMEs, Innovators
by Mary Swire, Tax-News.com, Hong Kong
Tuesday, July 11, 2017
Hong Kong is considering introducing tax relief for small and medium enterprises and providing additional tax deductions for research and development.
The Government has confirmed that a new "tax policy unit" has been instructed to consider the proposals of Hong Kong's new Chief Executive, Carrie Lam, who took office on July 1, to: introduce a two-tier profits tax rate system and lower the profits tax rate for the first HKD2m (USD256,000) of profit from the current 16.5 percent to 10 percent; and provide additional tax deductions for business spending on research and development activities.
James Lau, the Secretary for Financial Services and the Treasury, told the Legislative Council that "once specific proposals have been drawn up, the Government will consult the stakeholders concerned."
In addition, he ruled out a change to anti-avoidance provisions on the leasing of plant and machinery contained in Section 39E of the Inland Revenue Ordinance, and told lawmakers that Hong Kong and Mainland China continue to discuss the taxation of individuals to simplify arrangements for expatriates and cross-border workers.