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Hong Kong Sets Out Response To Int'l Tax Reform Plans

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

06 August 2021


Hong Kong's Secretary for Financial Services and the Treasury, Christopher Hui Ching-yu, has set out how the territory intends to respond to the OECD's proposed new international tax framework.

The Secretary was asked about the impact of proposals for a new global minimum corporate tax rate of 15 percent on Hong Kong and its international competitiveness. He was asked whether it would impact those businesses that due to their size benefit from a concessionary rate of tax. He said, as the plans involve a minimum tax only for companies whose turnover is at least EUR750m, SMEs in Hong Kong will not be affected, despite these businesses benefiting from a concessionary rate of corporate tax of less than 15 percent.

Further, he was asked how the Government would respond to the impact of the changes on the territory's attractiveness compared with other large financial centers. He said the Government has already begun to respond to the potential impact of the tax changes on Hong Kong's competitiveness, including with the tax changes included in Hong Kong's Budget, released in February. He said Hong Kong Government will implement the new international framework but will seek to ensure that it retains its relative advantages of offering a simple, clear, and fair tax system, while minimizing compliance burdens for businesses.

He said the BEPS 2.0 advisory group, established to advise the Government on potential policy responses, is to submit a report to the Government as soon as the OECD finalizes the technical details of its proposals, expected to occur in October.

TAGS: compliance | tax | business | transfer pricing | Hong Kong | BEPS

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