CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Hong Kong Implements Treasury Center Tax Incentives

Hong Kong Implements Treasury Center Tax Incentives

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

06 June 2016


On June 3, the Government gazetted the Inland Revenue (Amendment) (No. 2) Ordinance 2016 (the Amendment Ordinance), which enables the deduction of interest payable on money borrowed by a corporation carrying on an intra-group financing business in Hong Kong, and introduces a concessionary 8.25 percent profits tax rate for qualifying corporate treasury centers.

The Amendment Ordinance, the legislation for which was enacted by the Legislative Council on May 26, also clarifies the profits tax and stamp duty treatment in respect of regulatory capital securities (RCSs) issued by banks to comply with the Basel III capital adequacy requirements.

The concessionary profits tax rate for qualifying corporate treasury centers (at 50 percent of the prevailing profits tax rate) applies to relevant profits accrued on or after April 1, 2016, and the new interest deduction rule applies to interest payable in relation to an intra-group financing business on or after the same day. Revised provisions in relation to RCSs, and related amendments to the Stamp Duty Ordinance, went into effect on June 3.

The Secretary for Financial Services and the Treasury, K C Chan, said: "The Amendment Ordinance provides a conducive environment for attracting multinational and Mainland corporations to centralize their treasury functions in Hong Kong, thereby enhancing the competitiveness of our financial markets and contributing to the development of a headquarters economy."

It was confirmed that Hong Kong's Inland Revenue Department will issue Departmental Interpretation and Practice Notes to explain the operation of the tax measures, as well as the anti-avoidance provisions that have been included so as to ensure that the tax incentives are consistent with the latest international standards to combat base erosion and profit shifting.

TAGS: tax | business | tax incentives | law | corporation tax | treasury management | corporate headquarters | legislation | tax rates | stamp duty | Hong Kong | tax breaks | regulation

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »