Hong Kong tax newsletters
Mazars’ comments on Hong Kong tax issues.
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March 2020 - An interim review of the economic substance rules in Bermuda, the Cayman islands and the BVI
In December 2018, Bermuda, Cayman Islands and the BVI, along with many other jurisdictions with low or zero rate of corporate income tax, passed legislations that introduced increased economic substance requirements for certain entities.
December 2019 - Transfer Pricing In Hong Kong - Departmental Interpretation and Practice Notes
July 2019 - Economic Substance in Bermuda, the Cayman Islands and the BVI – Understanding the Requirements
In December 2018, Bermuda, Cayman Islands and the BVI, along with many other jurisdictions with low or zero rate of corporate income tax, passed legislations that introduced increased economic substance requirements for certain entities.The legislations are designed to meet the requirements outlined by the European Union’s (“EU’s”) intergovernmental Code of Conduct Group (“CoCG”) on Business Taxation, which are aimed at jurisdictions with low or zero rate of corporate income tax.The Organization for Economic Co-operation and Development (“OECD”), in the project on Inclusive Framework on Base Erosion and Profit Shifting (“BEPS”), also issued a document entitled “Resumption of Application of Substantial Activities Factor to No or only Nominal Tax Jurisdictions” (the “OECD document”) in November 2018.
February 2019 - Inland Revenue (Profits Tax Exemption for Funds) Amendment Bill 2018
The Government published in the Gazette on December 7 the Inland Revenue (Profits Tax Exemption for Funds) (Amendment) Bill 2018 to provide profits tax exemption for eligible funds operating in Hong Kong. The main objective of the Bill is to address the concerns of the Council of the European Union over the ring-fencing features1 of Hong Kong’s tax regimes for privately offered offshore funds and enhance the competitiveness of our tax regimes by creating a level playing field for all funds operating in Hong Kong.
Jan 2019 - Country-by-Country Reporting in HK
The Inland Revenue (Amendment) (No.6) Ordinance 2018 (the “Amendment Ordinance”) passed into law in July 2018, introduces statutory transfer pricing regime and implements various minimum standards under the Organisation for Economic Co-operation and Development (“OECD”)’s Base Erosion and Profit Shifting (“BEPS”) Action Plans. The Amendment Ordinance adopts the three-tier documentation structure, comprising a Master File, Local File and Country-by-Country Reporting (“CbCR”) recommended in the OECD BEPS Action Plan 13.
October 2018 - New tax measures proposed in 2018 Hong Kong Policy Address
On 10 October 2018, the Chief Executive of Hong Kong, Carrie Lam, presented her second policy address to the Legislative Council. In her address, Lam has laid out various measures covering a wide range of issues from the housing, medical care and welfare. She has also proposed a number of tax-related measures and provided updates on the tax measures proposed in the 2018-2019 budget.
July 2018 - The Transfer Pricing and BEPS Legislation Passed in Hong Kong
The legislation to (1) introduce the statutory transfer pricing regime, and (2) implement the various minimum standards under the OECD’s Base Erosion and Profit Shifting (“BEPS”) Action Plans, Inland Revenue (Amendment) (No.6) Ordinance 2018 ( the “Bill”) was passed by the Legislative Council on 4 July 2018. Please refer to our February and March 2018 Hong Kong Tax News on the background leading to the then draft legislation (the “Draft Bill”).
May 2018 - Enhanced Deduction for R&D Expenditures Introduced in Hong Kong
To encourage enterprises to invest in R&D in Hong Kong and to promote local R&D activities, the Hong Kong government proposed in the 2017 Policy Address to introduce an enhanced tax deduction for R&D expenditure.
April 2018 (Issue No. 2) - Comprehensive Double Taxation Agreement with India
On 19 March 2018, Hong Kong concluded a comprehensive double taxation agreement (“CDTA”) with India. This brings the total number of CDTA entered by Hong Kong with other jurisdictions to 39.
April 2018 - Hong Kong Enacted Legislation For a Two-tiered Profits Tax Rates Regime
Inland Revenue (Amendment) (No.3) Ordinance 2018 for introducing a two-tiered profits tax rates regime was enacted on 29 March 2018. The two-tiered profits tax rates regime will be effective from the year of assessment 2018/2019 (i.e. on or after 1 April 2018).