Hong Kong Budget Address 2021/22
La Nao Consulting is a MexCham HK Platinum Member.
On 24th February, 2021, the Finance Secretary of the Hong Kong Special Administrative Region, Mr. Paul Chan, announced the 2021/22 fiscal policy of the government. The most important points of the fiscal / financial policy that will enter into force on 1st April, 2021 are the following:
1. Income / Profits Tax
Profits Tax is regulated in Section 14 of the Inland Revenue Ordinance ("IRO"). The tax rate on the profits obtained by 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. The Profits Tax for 2020/21 will have a 100% reduction on the amount to be paid subject to a maximum of HKD10,000 for each case.
2. Government Fees
For the 2021/22 fiscal period the government fees of the Business Registration Certificate remain at HKD250. The fees to pay for the presentation of the Annual Return will be waived for this period.
3. Rates for non-domestic properties (for commercial use)
Rates to pay for properties that are not for domestic use in 2021/22, will be reduced subject to a maximum of HKD1,500 per room for the first two quarters of the year. For the next two quarters, they will be reduced subject to a maximum of HKD1,000 per quarter.
4. Salary Tax and Personal Income
The 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 less. This tax for fiscal year 2020/21 will have a 100% reduction on the amount to be paid, subject to a maximum of HKD10,000 for each case.
The following table summarizes the annual deductions in HKD:
5. Stock market
The rate for the transfer of shares in the stock market will increase from 0.10% to 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. The maximum applicable business loan amount is based on wages and rental expenses for 6 months and subject to a maximum of HKD6 million.
If you require more information about the Budget Policy 2021/22 of the Government of the Hong Kong Special Administrative Region and other tax issues in the region, do not hesitate to contact La Nao Consulting at +852 2528 4999 or by email at info@la-nao.com
Sincerely,
La Nao Consulting
Platinum Member
Author
Alejandro Milan Partner, La Nao Consulting
*Disclaimer: This article contains the content contributor's views and opinions and does not necessarily reflect those of MexCham HK.
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