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Hong Kong Adds Ticket Tax To Fund Airport Expansion

by Mary Swire, Tax-News.com, Hong Kong

02 June 2016


Airport Authority Hong Kong has announced that an airport construction fee (ACF) will be collected on air tickets issued on or after August 1, 2016.

Airlines will collect the ACF from departing passengers, including origin-destination and transit/transfer passengers, at Hong Kong International Airport (HKIA) when air tickets are issued. Tickets issued before August 1, 2016 ,will not incur the ACF.

The ACF is to be collected to fund the HKIA's expansion into a three-runway system (3RS). These improves are necessary to meet future air traffic growth and maintain Hong Kong's competitiveness as an international aviation hub. Initial reclamation work for the 3RS is scheduled to start on August 1, 2016.

The charging rate will depend on flight distance, ticket class, and whether the flight type is origin-destination or transit/transfer. It is expected that about 70 percent of passengers departing from HKIA will pay an ACF of HKD90 (USD11.60) or less.

The ACF for short-haul departing passengers flying in economy class is HKD90 (USD11.60), while the fee for short-haul passengers in first/business class is HKD160. For long-haul passengers, the fee for economy and first/business class tickets are HKD160 and HKD180, respectively. The ACF for short-haul transit/transfer passengers in economy class is HKD70.

The ACF collection will remain in effect until all borrowings related to the 3RS project have been fully repaid. The charging rate of the ACF will remain unchanged throughout the collection period.

TAGS: tax | business | air passenger duty (APD) | aviation | fees | travel and tourism | Hong Kong | construction

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