CENTRAL: Hong Kong has gazetted an ordinance to establish a new two-tier corporate tax regime from April 1, 2018.
The new regime lowers the corporate profits tax rate to 8.25 percent for the first HKD2m (USD255,000) of profits. Profits above this amount continue to be subject to a tax at a rate of 16.5 percent.
For unincorporated businesses (partnerships and sole proprietorships), the two-tiered tax rates are set at 7.5 percent and 15 percent, respectively.
To ensure the tax benefits reach small and medium enterprises, the two-tiered rates may be restricted to only one enterprise nominated among connected entities.
The Inland Revenue says the new regime will see annual savings of up to HKD165,000 for corporations and HKD150,000 for unincorporated businesses.
