Hong Kong SAR
New legislation enacted
The following pieces of legislation were enacted in the past 12 months:
- The Inland Revenue (Amendment) (Miscellaneous Provisions) Ordinance 2021 was gazetted on 11 June 2021. The Ordinance amends the Inland Revenue Ordinance (IRO) (1) to codify the tax treatments for amalgamation of companies under the court-free procedures and for transfer or succession of specified assets in specified events; (2) to revise rules for deduction of foreign tax in Hong Kong; and (3) to enhance the statutory framework for furnishing of tax returns (including e-filing of profits tax returns). The changes related to (1) above apply to corporate amalgamations / specified events that take effect / occur on or after 11 June 2021 whereas the revised deduction rules in (2) above apply from year of assessment 2021/22.
- The Revenue (Stamp Duty) Ordinance 2021 was gazetted on 11 June 2021. Effective from 1 August 2021, the stamp duty rate on transfer of Hong Kong stock will be increased from 0.1% to 0.13% of the consideration or value of each transaction payable by buyers and sellers respectively.
- The Inland Revenue (Amendment) (Tax Concessions for Carried Interest) Ordinance 2021 was enacted on 7 May 2021. The Ordinance provides a 0% profits tax rate on eligible carried interest. The carried interest tax concession applies to amounts received by or accrued to a qualifying person on or after 1 April 2020 retrospectively.
- The Revenue (Tax Concessions) Ordinance 2021 was enacted on 7 May 2021 to give effect to the 100% reduction of profits tax for year of assessment 2020/21, subject to a cap of HKD 10,000.
- The Stamp Duty (Amendment) Ordinance 2021 was gazetted on 19 March 2021 to abolish the Doubled Ad Valorem Stamp Duty (DSD) imposed on transfer of non-residential property in Hong Kong. The Ordinance is deemed to have come into operation on 26 November 2020. Accordingly, transfer of non-residential property in Hong Kong executed on or after 26 November 2020 is subject to ad valorem stand duty at Scale 2 rates ranging from HKD 100 (for property consideration of up to HKD 2 million) to 4.25% (for property consideration exceeding HKD 20 million).
- The Stamp Duty Ordinance (Amendment of Schedule 8) Regulation 2020 was enacted on 1 August 2020 to waive stamp duty on stock transfers paid by the exchange traded fund market makers in the course of allotting and redeeming ETF units listed in Hong Kong.
- The Inland Revenue (Amendment) (Profits Tax Concessions for Insurance-related Businesses) Ordinance 2020 was enacted on 24 July 2020. The Ordinance offers a concessionary tax rate (at 8.25%) for general reinsurance business of direct insurers, selected general insurance businesses of direct insurers and selected insurance brokerage businesses of licensed insurance brokers. The concessionary tax rate applies to qualifying sums received or accrued on or after 19 March 2021.