Due to the outbreak of Coronavirus disease (COVID-19) in Hong Kong, China and Global, Mr Paul Chan Mo-po, GBM, GBS, MH, JP, Financial Secretary proposed a number of tax measures in the 2020-21 Budget yesterday in order to boost local consumption and ease economy. One of the major focus is a single payment of HK$10,000 to each permanent resident of the city aged 18 or above.
NOVA, as your reliable business partner, knows it may be a hard time for most of the business, thus we had extracted some of the main key points which may benefit for your business as follow.
Reducing profits tax for the year of assessment 2019/20 by 100 per cent, subject to a ceiling of $20,000. The reduction will be reflected in the final tax payable for the year of assessment 2019/20.
Reducing salaries tax and tax under personal assessment for 2019-20 assessment year by 100%, subject to ceiling of $20,000.
- Waiving rates for non-domestic properties for four quarters of 2020-21, subject to a ceiling of $5,000 per quarter in the first two quarters and a ceiling of $1,500 per quarter in the remaining two quarters for each rateable non-domestic property.
- Non-domestic electricity accounts will enjoy a 75% discount up to a ceiling of HK$5,000 for four months. Likewise, water and sewage costs will be discounted by 75% up to a cap of HK$20,000 and HK$12,500 respectively.
- Tenants of government properties, government land and EcoPark will see rent discounts of 50%. Rent and fees for eligible operators of properties will be slashed by 50%.
- Business registration fees will be waived for 2020-21 (Except payable levy of HKD$250 for 1-year certificate; payable levy of HKD$750 for 3-year certificate).
- Company registry fees for annual returns will be waived for two years.
- Waive stamp duty on stock transfers paid by the Exchange Traded Fund (ETF) market makers when creating and redeeming ETF units in Hong Kong.
- Establish a limited partnership regime and provide tax concession for carried interest issued by private equity funds to attract them to domicile and operate in Hong Kong.
Innovation and Technology
- Increase the grant ceiling under the Technology Voucher Programme from $400,000 to $600,000, raise the Government’s funding ratio from 67% to 75% and the maximum number of approved projects per applicant would be increased from 4 to 6.
- Inject $345 million for a pilot subsidy scheme to encourage the logistics industry to enhance productivity through the application of technology. The maximum grant of each applicant would be $1,000,000 in total for the maximum 4 projects.
- Concessionary low-interest loan: Introduce a concessionary low-interest loan with 100% Government guarantee for enterprises under the SME Financing Guarantee Scheme, which will be open for application for 6 months. Maximum loan of $2 million with repayment period up to 3 years. Moratorium on principal repayment for first 6 months.
- Local recycling enterprises: provide $100 million rental subsidy for 6 months.
*All of the above are coming from the 2020-21 Budget proposal. The relevant legislative amendment is subject to the scrutiny by the Legislative Council.
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