On 23 February, 2022, the Finance Secretary of the Hong Kong Special Administrative Region, Mr. Paul Chan, announced the 2022/23 Fiscal Policy.
The most important points of the fiscal/financial policy that will enter into force on 1st April, 2022 are the following:
1. Profits Tax
Profits Tax is regulated in Section 14 of the Inland Revenue Ordinance ("IRO"). The tax rate on the first HKD2 million remains at 8.25%, and from that amount the base rate of 16.5% will continue. This is with the intention of continuing to support SMEs. Profits Tax for 2021/22 will have a 100% reduction on the amount to be paid subject to a ceiling of HKD10,000 for each case.
2. Government Fees for Business Registration and Annual Return
For 2022/23 the government fees for the renewal of the Business Registration Certificate and filing the Annual Return will continue to be waived.
3. Rates for non-domestic properties (for commercial use)
Provide rates concession for non-domestic properties for 2022/23, subject to a ceiling of $5,000 per quarter in the first two quarters and a ceiling of $2,000 per quarter in the remaining two quarters
4. Salary Tax and Personal Income
Salary Tax is regulated under section 8 of the IRO. This tax is levied on salary and/or pension income earned in or from Hong Kong. Individuals are taxed at a progressive rate on their net income, that is, after deductions, starting at 2% and ending at 17%; or at a standard rate of 15%, whichever is lower. For 2021/22 there will be a 100% reduction on the amount to be paid, subject to a ceiling of HKD10,000 for each case.
Also, starting from 2022/23, a new tax reduction for domestic rental expenses subject to a ceiling of HKD100,000 per married couple is being introduced with the objective to ease the burden of renting private property.
The following table summarizes the annual deductions in HKD:
5. Stock market
The rate for the transfer of shares in the stock market will remain at 0.13% of the value of each purchase and sale transaction.
6. Government Backed SME Loan
The government extended the application for the low-interest concessional loan to SMEs (SME Financing Guarantee Scheme) with a guarantee given by the government to end June 2023. The maximum applicable business loan amount is based on wages and rental expenses and subject to a maximum of HKD9 million.
7. Consumption Vouchers
To boost spending, each of Hong Kong’s 6.6 million permanent residents and new immigrants aged 18 or above will be given HKD10,000 in consumption vouchers in two instalments. The first instalment of HKD5,000 is expected to be handed out in April, and the second tranche will be given in August.
If you require more information about the Budget Policy 2022/23 of the Government of the Hong Kong Special Administrative Region and other tax issues in the region, do not hesitate to contact us at +852 2528 4999 or by email at: email@example.com
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