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2020-21 Budget & Tax Measures

Hong Kong Financial Secretary has set the 2020-21 budget in February 2020. Below is a summary of the proposed budget.

Profits (Corporate) Tax

  1. Corporate Tax rate for the first HK$2 million of profits is reduced to 8.25%.
  2. Corporate Tax rate on remaining profits is 16.5%.
  3. Offshore profit is not taxable by Hong Kong authority.
  4. Losses can continue to be carried forward for each accounting year.
  5. Hong Kong has no capital gain tax and no withholding tax on payment.
  6. There is no tax on dividend.
  7. Business Registration licence fee is waived for financial year 2020/21.
  8. Increase funding for Technology Voucher Programme. The new ceiling is HK$600,000.
  9. Increase funding for the Dedicated Fund on Branding, Upgrading and Domestic Sales.
  10. Waive registration fees for company annual returns NAR1 for 2 years
  11. Subsidies local recycling enterprises for $100 million rental for 6 months
  12. Introduce 100% Government guarantee concessionary low-interest loan to local businesses for a maximum loan of $2 million with repayment period up to 3 years.

Salaries (Personal) Tax

The progressive tax rate for salary income remains as below for the financial year 2019/20.

Personal Income

Progressive Tax Rate %

First HK$50,000

2%

Next HK$50,000

6%

Next HK$50,000

10%

Next HK$50,000

14%

Remaining income

17%

The Financial Secretary also proposed an one-time 100% tax deduction for profits tax and salaries tax in year of assessment 2019/20, subject to a ceiling of HK$20,000 per case. The relevant legislation has been effected on 19 June 2020.

Employment Support Scheme – Safeguard Jobs 

The Hong Kong Government has introduced Employment Support Scheme under the Anti-epidemic Fund. The fund is to assist active Hong Kong businesses to retain talents and employees. There will be two rounds of subsidies from June to August 2020 and from September to November 2020. Eligible employers can receive 50% of the actual salary paid to each employee at maximum amount of HK$18,000 per month. Hence, the maximum wage for each employee is HK$9000 per month. To start the application, please visit https://www.ess.gov.hk/en/index.html.

Should you have any questions, feel free to contact our licenced CPA and Chartered secretary at info@getstarted.hk.