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Key tax developments

Key tax developments

Significant tax developments over the past few years, as well as developments that may be implemented in the future

Significant tax developments over the years, and those that may soon be implemented

Hong Kong Budget Summary
2019-2020

Key tax developments

In her second policy address in October 2018, Chief Executive Carrie Lam continued to take a more proactive view on tax and the use of tax incentives to enhance Hong Kong’s position as an international finance centre and as a major platform for capital raising and financing. The tax developments, some of which are illustrated below, helped diversify Hong Kong’s economy and remove a few of the competitive disadvantages the city faces in attracting and retaining business.

Group tax loss relief*
Vacancy tax on properties**
Regional headquarters incentives***

* Proposal by the Financial Services Development Council, Hong Kong
** Proposed bill subject to Legislative Council’s approval
*** Proposal by KPMG

For further details, please access our Tax Alerts

Enacted
  • Islamic bonds (2013)
  • Offshore funds exemption (2015)
  • Taxation of corporate treasury centres (2016)
  • Automatic exchange of information (2016)
  • Tax treatment of regulatory capital securities (2016)
  • Taxation of aircraft leasing activities (2017)
  • Two-tiered tax system (2018)
  • Transfer pricing legislation (2018)
  • Tax exemption for open-ended fund companies (2018)
  • R&D enhanced deduction (2018)
Not yet enacted
  • Group tax loss relief*
  • Vacancy tax on properties**
  • Regional headquarters incentives***

* Proposal by the Financial Services Development Council, Hong Kong
** Proposed bill subject to Legislative Council’s approval
*** Proposal by KPMG

For further details, please access our Tax Alerts