Corporate tax for medium-sized and small companies in Hong Kong will be reduced

Corporate tax for medium-sized and small companies in Hong Kong will be reduced

Kerry Lam, the head of the Hong Kong administration, announced about tax changes that will reduce the fiscal burden for companies.

It is planned to introduce a two-stage system of taxation of profits, as well as to implement incentives for companies that are engaged in scientific development.

The company, which is engaged in scientific development, will be able to take into account the costs for R&D in triplicate, other taxes - in twofold.

The abovementioned two-stage system is similar to the current system in Singapore. If in more detail: a reduced tax rate of 8.25 percent will apply to the first 2 million Hong Kong dollars of the company's profits, while profits of more than 2 million Hong Kong dollars are subject to the previous standard rate of 16.5 percent.

Tax incentives refer to just one of the items in the plan of the head of the Hong Kong administration to improve the competitiveness of the economy of this jurisdiction, as well as its diversification. It is planned to implement measures regarding the development of the exhibition industry, which is so important for Hong Kong as an international center for trade and entrepreneurship, a center for promoting technological development and innovation, as well as training qualified personnel who can work in critical areas for this jurisdiction.

For more detailed information, please contact the lawyers of Law&Trust International.