The Hong Kong budget announcements for 2022/23 were delivered on 23 February 2022.
BEPS 2.0 proposals
Hong Kong will bring in a legislative proposal in the second half of 2022 to enact the requirements of the OECD/G20 agreement in relation to the two-pillar approach to international tax reform (BEPS 2.0). The Hong Kong legislation would aim to implement the requirements for a global minimum tax rate under Pillar Two and other necessary legislation in relation to large multinationals under Pillar One. The measures would be applicable from 2023 in relation to multinational enterprises with global consolidated turnover more than EUR 750 million.
Hong Kong is also looking at the possibility of a domestic top-up tax, that would ensure Hong Kong entities that are part of a large multinational enterprise would pay a minimum effective tax rate of 15%. This domestic minimum tax would be introduced from the year of assessment 2024/25.
Tax relief for maritime industry
Tax relief will be introduced for further sectors of the maritime industry, in addition to the relief currently given to ship leasing and marine insurance businesses. Incentives could be given for operations such as ship managers, agents and brokers. There would be a requirement for business substance in Hong Kong in line with international tax standards.
Proposed tax concessions for family offices set up in Hong Kong
From the year of assessment 2022/23, tax relief would be available for eligible family investment management entities that are managed by single-family offices in Hong Kong.
Salaries tax
A tax deduction up to a maximum of HKD 100,000 is proposed from 2022/23 in relation to domestic rent paid by taxpayers who do not own any residential property.
One-off measures
Certain one-off measures will help individuals and businesses in the difficult economic situation:
- Profits tax and salaries tax would be waived for 2021/22, up to a ceiling of HKD 10,000 tax.
- The rates (local property tax) will be waived for non-domestic properties for 2022/23, up to a maximum of HKD 5,000 each quarter for the first two quarters and HKD 2,000 each quarter for the last two quarters.
- Rates will also be waived for domestic properties for 2022/23, up to a maximum of HKD 1,500 each quarter for the first two quarters and HKD 1,000 each quarter for the last two quarters.
- Business registration fees are waived for 2022/23.
Stamp duty
The rate of stamp duty on stock transfers is to increase from 0.1% to 0.13%.
Non-tax measures
Further measures include the following:
- An amount of HKD 600 million is to be allocated to improving technology applications for public services.
- The government is setting aside HKD 85 million to strengthen the intellectual property regime.
- An export financing scheme is to be introduced to help small and medium enterprises.
