On 23 February 2022, Hong Kong Financial Secretary Paul Chan delivered the 2022-23 Budget providing following corporate tax measures.
The Financial Secretary proposed a one-off reduction of profits tax for the year of assessment 2021/22 by 100 per cent, subject to a ceiling of $10,000 per case. The tax reduction will reduce the amount of tax payable by taxpayers for the year of assessment 2021/22. Taxpayers should file their profits tax returns for the year of assessment 2021/22 as usual. Upon enactment of the relevant legislation, the Inland Revenue Department will effect the reduction in the final assessment.
The proposed tax reduction will only be applicable to the final tax for the year of assessment 2021/22, but not to the provisional tax of the same year. Therefore, taxpayers are still required to pay the provisional tax on time as stipulated in the demand notes that have been issued to them. The provisional tax paid will, in accordance with the Inland Revenue Ordinance, be applied in payment of the final tax for the year of assessment 2021/22 and provisional tax for the year of assessment 2022/23. The excess balance, if any, will be refunded.
The Financial Secretary also proposed to waive business registration fees for 2022-23. The above proposed tax measures will be implemented after completion of the relevant legislative processes.
