The bill is expected to relieve financial burden of taxpayers.
The Legislative Council has passed the Revenue (Tax Concessions) Bill 2021, which Financial Services and Treasury Secretary Christopher Hui said carried the government’s proposal to reduce personal taxes for the year 2020/21.
The proposal will reduce salaries tax, tax under personal assessment and profits tax for the year of 2020/21 b 100%, with a ceiling of $10,000 per case.
“The concessionary measure helps relieve the financial burden of taxpayers. The Inland Revenue Department will reflect the tax reductions in the tax demand notes to be issued,” Hui said.
The government had proposed granting tax concessions during the 2021/22 budget statement last February.
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The measure will benefit some 1.87 million taxpayers of salaries tax and tax under personal assessment, and 128,000 businesses. This will in effect reduce the government’s revenue in 2021/22 by $12.45b.
Further, Hui also welcomed the passage of the Inland Revenue (Amendment) (Tax Concessions for Carried Interest) Bill 2021.
The bill will amend the Inland Revenue Ordinance to provide tax concessions for carried interest distributed by eligible private equity funds in Hong Kong.
This is expected to “attract more private equity funds to operate and be managed in Hong Kong, thus boosting more investment management and related activities,” Hui said.
It will also expand the classes of assets that may be held and administered by a special purpose entity on behalf of a fund for the purpose of profits tax exemption regime for funds.
The Bill will commence on the same day the amendment ordinance is gazette. It will apply concessionary tax treatment to eligible carried interest received by, or accrued to, qualifying carried interest recipients on or after April 1, 2020.
