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Hong Kong To Proceed With Lower Profits Tax Rate

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

15 August 2017


Hong Kong is preparing to take forward proposals to lower profits tax to 10 percent for smaller firms.

Under the new arrangement, the first HKD2m (USD255,640) of business profits will be subject to a tax rate of 10 percent, while the remainder will continue to be taxed at 16.5 percent.

The plan is designed to reduce the burden on smaller businesses. It is now awaiting approval from Chief Executive Carrie Lam, who proposed the tax relief as a pre-election pledge. Legislation would then be tabled before the legislative assembly.

The tax relief is thought to be worth about HKD5bn (USD639.1m).

Hong Kong saw a HKD92bn (USD11.7bn) surplus for the fiscal year 2016-17 and has total reserves of around HKD950bn (USD121.4bn).

TAGS: Finance | tax | small business | business | Hong Kong | tax reform

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