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Hong Kong Examines Air Passenger Departure Tax Refunds

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

12 November 2015


Replying to a question in the Legislative Council on November 11, Hong Kong's Secretary for Financial Services and the Treasury, K C Chan, agreed that the Government should strengthen its monitoring of Air Passenger Departure Tax (APDT) refunds made by airlines.

The current rate of the APDT is HKD120 (USD15.50) per passenger (12 years of age or above) departing from Hong Kong by air through Hong Kong International Airport, or by helicopter from the Heliport at the Hong Kong-Macau Ferry Terminal. The rate has remained unchanged since 2004, and provided almost HKD2.35bn in revenue in 2014-15.

Hong Kong's tax code provides that the APDT paid by a passenger who has not departed from Hong Kong by aircraft shall be refunded by the operator. However, Chan's questioner noted that survey findings recently released by the Consumer Council revealed that some airliners failed to take the initiative to make such tax refunds to passengers; failed to show a breakdown of the APDT charged; set time limits for APDT refund applications; and charged passengers handling fees for tax refund requests.

In his reply, Chan confirmed that the Civil Aviation Department (CAD) has been reminding the airlines that the law clearly sets out the requirement for operators to collect APDT and make full refunds of the tax to passengers who do not depart by air, with no allowance for the imposition of any charge.

"In the light of the recent report and recommendations made by the Consumer Council on airlines' refund arrangements," he added, "CAD undertakes to put in place a mechanism to require airlines to furnish the relevant information to the Department, so that it can strengthen the monitoring of whether airlines have made refunds of APDT to the passengers concerned."

Chan added that "CAD would also step up the monitoring of any charging of a fee for the refund of APDT. CAD has already issued letters to the Board of Airline Representatives in Hong Kong and individual airlines which are not members of the Board, reminding them of the statutory requirements about APDT refunds."

TAGS: compliance | tax | air passenger duty (APD) | tax compliance | law | fees | travel and tourism | tax rates | Hong Kong | tax breaks | regulation | Tax

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