HONG KONG INTRODUCES A TWO TIERED PROFITS TAX RATE REGIME
The Inland Revenue (Amendment) (No. 3) Ordinance 2018 was gazetted on 29 March 2018 in Hong Kong to implement the two-tiered profits tax regime to take effect on 1 April 2018. The key objectives of the change in the profit tax regime are to maintain a competitive tax system to promote economic development and to maintain a simple low tax regime. The introduction of the twotiered profit tax regime will:
Reduce the overall tax burden for small and medium enterprises (“SME”) and start-ups;
Allow enterprises to reinvest the tax saving to upgrade their hardware and software to boost their overall business operations and efficiency;
Drive economic growth, create job opportunities and enhance Hong Kong’s competitiveness;
Boost Hong Kong status as the preferred investment jurisdiction.
The two-tiered profits tax regime will apply to both corporations and unincorporated businesses (i.e., sole proprietorships and partnerships) and will apply with effect from the year of assessment 2018/2019 (i.e., commencing on or after 1 April 2018).
If you wish to understand more on the two-tiered profits tax regime, please feel free to approach:
Ms. Peggy Fung – Email: firstname.lastname@example.org
Ms Winifred Yue – Email:email@example.com
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