Wednesday 26th February 2020: New personal and corporate tax incentives are among the measures announced in the Annual Budget issued by Financial Secretary Mr. Paul Chan earlier today.
They come in the form of a proposed one-off tax rebate of 100% or HK$20,000, whichever is lower, for salaries tax, tax under personal assessment and profits tax. The rebates will be applied to tax levied for the current financial year, 2019-20.
Mr. Chan proposed a waiver on Business Registration fees for 2020/21, benefitting 1.5 million Hong Kong-registered businesses currently facing an annual cost of HK$2,250. Further, registration fees for all annual returns (except for late delivery) charged by the Companies Registry will be waived for two years, benefitting about 1.4 million companies.
The Financial Secretary said the Budget placed emphasis on supporting enterprises, safeguarding jobs, stimulating the economy and relieving people's burden.
The highlights of the Budget are as follows:
No change to the Profits Tax rate was proposed. A summary of the profits tax rates for 2019/20 onwards is shown as below:
|Tax Rates||2019/20 onwards|
* Only one entity among “connected entities” will be eligible for the reduced tax rate.
No change to allowances and deductions was proposed. A summary of the allowances and deductions for 2019/20 onwards is shown as below:
|Married Person Allowance||264,000|
|Single Parent Allowance||132,000|
|For each child born during the year||120,000|
|Dependent Brother or Dependent Sister Allowance||37,500|
|Dependant Parent and Dependant Grandparent Allowance
|Additional Dependant Parent and Dependant Grandparent Allowance
|Disabled Dependant Allowance||75,000|
|Personal disability allowance||75,000|
|Expenses of self-education||100,000|
|Home Loan Interest||100,000; 20 Years|
|Elderly Residential Care||100,000|
|Approved Charitable Donations||35% of income after deductions|
|Voluntary Health Insurance Scheme||8,000|
|Annuity Premiums and MPF Voluntary Contributions||60,000|
No change is proposed. Tax Bands for salaries tax from year of assessment 2019/20 onwards are as follows:
|Progressive tax rate||Progressive tax applicable to the band HK$|
|200,001 and over||17%|
The Financial Secretary also noted the following:
We trust you will find the above useful information. Should you have any questions, please do not hesitate to contact us on (852) 3705 0095 or [email protected].