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2021-22 Budget & Tax Measures

Hong Kong Financial Secretary has set the 2021-22 budget earlier this year. Below is a summary of the budget report.

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. Hong Kong has no capital gain tax and no withholding tax on payment.
  5. There is no tax on dividend.
  6. Business Registration licence fee is waived for financial year 2021/22. Policy will remain until March 2022, and the license fee is currently HK$250.
  7. Keep funding ceiling for Technology Voucher Programme as HK$600,000.
  8. Waive registration fees for company annual returns NAR1.

Salaries (Personal) Tax

The progressive tax rate for salary income remains as below for the financial year 2021/22.

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 suggested an one-time 100% tax deduction for salaries tax for the year 2021, subject to a ceiling of HK$10,000 per case. The deduction is 50% less when compared to the policy of the previous year.

Employment Support Scheme – Safeguard Jobs (Program closed in 2021) 

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.