Hong Kong 2024 Policy Address – Major Tax Related Matters
On 16 October 2024, the Chief Executive of Hong Kong, Mr. John Lee, delivered his third Policy Address speech, with the theme ‘Reform for Enhancing Development and Building Our Future Together’.
It can be seen that the Hong Kong government endeavours to further develop Hong Kong as an international centre on various aspects, including but not limited to finance, commodity trading, innovation and technology, shipping, asset, wealth and risk management.
In order to achieve this goal, a number of measures will be introduced to attract more quality talents from overseas.
With a view to attract investments in Hong Kong, the Chief Executive has proposed various tax measures, including the following:
- Introducing a preferential tax regime to enterprises engaging in trading of commodities, e.g. gold and minerals, with a target that more related enterprises will have their business established in Hong Kong;
- Expanding the scope of tax concessions by adding more qualifying transactions eligible for profits tax concessions for funds and single-family offices;
- Further enhancing the existing preferential tax regime on ship leasing, ship management, ship agency, ship broking and marine insurance business, including introduction of new tax deduction arrangements for ship lessors pursuant to international tax rules;
- Reducing the duty rate for liquor with import price over HKD 200 from 100% to 10% while the duty rate for the portion of HKD 200 and below remains to be 100%, which has been effective as from 16 October 2024.
By the way, Hong Kong has proposed the company re-domiciliation regime and the relevant bill will be submitted to the Legislative Council by the end of 2024.
Hong Kong is a tax friendly jurisdiction. Under the territorial source system, only income which is derived from business, trade or profession carried on in Hong Kong and arising in or derived from Hong Kong shall be subject to profits tax under the general charging provisions.
In addition, Hong Kong has already introduced tax incentives for certain business industries and activities.
Please feel free to contact our tax team for more information about the Hong Kong tax position/entitlement to the preferential tax treatments of/by your (potential) entities.
