- In June 2016, a Tax Bill has been passed to attract multinational and mainland enterprises to establish Corporate Treasury Centres ("CTCs") in Hong Kong. This will involve the amendment of the Inland Revenue Ordinance ("IRO") by providing the following tax concessions:
- Concessionary profits tax rate for qualifying CTCs (i.e. 50% of prevailing profits rate for corporations = 8.25%); and
- Interest expenditure incurred for intra-group financing business will be deducted, subject to compliance with the specified conditions.
These above will apply retrospectively from 1 April 2016.
- To comply with the international standard for automatic exchange of financial account information ("AEOI") regarding tax matters, Inland Revenue (Amendment) Bill was introduced in January 2016 to amend the Inland Revenue Ordinance for public consultation and legislative process. In brief, under the AEOI standard, a financial institution (FI) is required to identify financial accounts held by tax residents of reportable jurisdictions (i.e. tax residents who are liable to tax by reason of residence in the jurisdictions with which Hong Kong has entered into an AEOI arrangement). FIs are required to collect the reportable information of these financial accounts, and furnish such information to the Inland Revenue Department (IRD). The IRD will exchange the information with the tax authorities of AEOI partner jurisdictions on an annual basis.
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