On 22 February 2023, Mr. Paul Chan, Financial Secretary, delivered his seventh budget speech. He forecasts a 3.5% to 5.5% GDP growth in 2023. The theme of this year’s budget is “Leaping Forward Steadily, Together We Bolster Prosperity under Our New Vision.” A moderately liberal fiscal stance will be taken this year.
Profits Tax
- Reducing Profits Tax by 100% for 2022/23, subject to a ceiling of HKD6,000.
Salaries Tax
- Reducing Salaries Tax and tax under personal assessment by 100% for 2022/23, subject to a ceiling of HKD6,000.
- Increasing basic child allowance and additional child allowance for each child born during the year of assessment from HKD120,000 to HKD130,000 starting from the year of assessment 2023/24.
New International Tax Standard – Base Erosion and Profit Shifting (BEPS2.0)
- Introducing a domestic minimum effective tax rate of 15% with regard to the MNE groups with global turnover of 750 million euros starting from 2025 onwards so as to safeguard Hong Kong's taxing rights.
Disposal of equity interests
- Putting forward an enhancement proposal in mid March 2023 to provide clearer guidelines on whether onshore gains on disposal of equity interests are subject to tax.
Financial Services
- Issuing no less than HKD 15 billion of retail green bonds and HKD 50 billion of Silver Bond in the next financial year.
- Providing HKD 100 million to InvestHK to attract more family offices in Hong Kong.
Supporting Enterprises
- Extending the application period of all guarantee products under the SME Financing Guarantee Scheme ( from June 2023 to March 2024.
- Providing tax deduction for the spectrum utilisation fees paid by telecommunications network operators which successfully bid for radio spectrum.
Rates
- Waiving rates for non-domestic properties for first two quarters of 2023/24, subject to a ceiling of HKD1,000 per quarter.
- Waiving rates for domestic properties for first two quarters of 2023/24, subject to a ceiling of HKD1,000 per quarter.
Stamp Duty
- Adjusting value bands of the ad valorem stamp duty payable for sale and purchase or transfer of residential and non-residential properties (Rates at Scale 2) as follows:-.
Other Relief Measures
- Issuing electronic consumption vouchers in instalments with a total value of HKD 5 000 to each eligible Hong Kong permanent resident and new arrival aged 18 or above.
- Granting each eligible residential electricity account a subsidy of HKD 1 000.
- Introducing a new Capital Investment EntrantScheme whereby applicants may reside and pursue development in Hong Kong after making investment at a certain amount in the local asset market, excluding property.
- Enhancing aircraft leasing preferential tax regime, include allowing tax deduction for the acquisition cost of aircraft and expanding the scope of leases and aircraft leasing activities.
- Introducing a “patent box” tax incentive to encourage the Innovation and Technology sector to create more patented inventions.
- Increasing tax deduction for Mandatory Provident Fund voluntary contributions made by employers for the their employees aged 65 or above, from 100 to 200 so as to encourage employment of elderly employees.