Hong Kong’s Chief Executive, Carrie Lam Cheng Yuet-ngor, is looking to go beyond her election campaign promises and reduce Hong Kong’s profits tax rate from the current 16.5 per cent to below 10 per cent for all businesses on the first HK$2 million in 2018.
On the two-tier profits tax system, the profits tax rate for the first $2 million of profits of enterprises will be lowered to 8.25%, or half of the standard profits tax rate, instead of 10% as proposed in my Election Manifesto. Profits above that amount will continue to be subject to the standard tax rate of 16.5% To ensure that the tax benefits will target small and medium enterprises, it will introduce restrictions such that each group of enterprises may only nominate one enterprise to benefit from the lower tax rate. To encourage research and R&D investment by enterprises, we propose that the first $2 million eligible R&D expenditure will enjoy a 300% tax deduction with the remainder at 200%. To learn more about how the taxation policies can bring benefits to your business, feel free to contract us for further discussion. Our email: [email protected] Whatsapp: +852-6073-3208
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