Hong Kong’s Financial Secretary announced his most recent plans for creating a new tax policy
. One issue that stood out was the narrow tax base in Hong Kong and the importance of maintaining a predictable tax regime
which the city is known for. Investors who open a Hong Kong company
primarily take advantage of the low taxation regime. Changing the current situation could mean risking impacting the international competitiveness, the Secretary believes.
Reviewing Hong Kong’s tax regime
In an attempt to review the city’s taxation regime, Financial Secretary Paul Chan Mo-po highlighted the fact that a tax cut that erodes the revenue base is not an option. Moreover, officials will not consider adjusting the tax rates on a very frequent basis because this could have a negative impact on foreign investor confidence.
Among the announcements for tax cuts that are already planned, the Hong Kong official cites the reduction of the profits tax
cut (a 75% cut, subject to a ceiling of 20,000 HK$) and the reduction of the salaries tax under personal assessment (also a 75% cut with a ceiling). It was estimated that this measure will be beneficial for some 1.84 million taxpayers in Hong Kong. Also on the list of most recent tax changes in Hong Kong is the widening of the marginal band for the salaries tax and the increase of the disabled dependent allowance.
Investors who are interested in knowing more about the tax changes for businesses and how they will impact their current business in the city can request the help provided by our company registration agents in Hong Kong
The 2017 Budget in Hong Kong
When announcing the Budget for 2017 the Financial Secretary also announced the surplus at the beginning of 2017. His measures received a generally positive reaction and were perceived as broadly balanced. Hong Kong officials plan on spending more on education and IT development in 2017 and other investment areas will also receive a better focus.
Companies in Hong Kong
that engage in trade could further be advantages by an initiative to broaden the Closer Economic Partnership Arrangement with Mainland China.
For more information on tax provisions in Hong Kong or if you want to know more about how to open a Hong Kong company