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Hong Kong: Tax relief measures

Hong Kong: Tax relief measures

The Financial Secretary in December 2019 announced certain tax relief measures, including provisions for making tax payments in instalments and subsidies for small- and medium-sized enterprises (SMEs). These measures are intended to provide support for enterprises and with regard to employment in the current social and economic environment.

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The package of tax measures includes the following:

  • Waive for up to one year the surcharge on tax payments under an approved installment plan. The waiver is applicable for the 2018/19 year of assessment, and covers profits tax, salaries tax, and personal assessments. Eligible taxpayers could apply for an installment plan before the due dates of the tax payments.
  • Waive 75% of water and sewage charges for non-domestic households from 1 December 2019 to 31 March 2020, subject to a monthly cap of $20,000* and $12,500, respectively, per household per month.
  • Provide an electricity subsidy to each eligible non-residential electricity account holder to cover 75% of their monthly billed electricity charges, subject to a cap of $5,000 per account, per month for four months ($20,000 in total per account).
  • Provide an enhanced-rates concession in the fourth quarter of 2019-20 (1 January to 31 March 2020) to all non-domestic properties. The exemption ceiling for each non-domestic property chargeable to rates will be increased from $1,500 to $5,000 for that quarter.
  • Use the amount of turnover rent received from the terminal operator of the Kai Tak Cruise Terminal to offer, through the operator, fees and rent reduction for cruise lines and existing tenants to support cruise lines’ continuous deployment and berthing in Hong Kong and to promote the business of relevant sectors. The arrangement will last for six months, effective from 1 December 2019.
  • Launch a one-time rental subsidy scheme to recycling enterprises.
  • Waive the annual license fees for all licensed individuals and intermediaries by the Securities and Futures Commission for the financial year 2020-21.
  • Enhance and extend an employee retraining program, including possibly increasing the maximum amount of monthly allowance per trainee from $4,000 to $5,800 through legislative amendment, expanding the choices of trades and courses, in particular the provision of part-time arrangement for the popular "vocational skills" courses, and offering more training places based on demand.
  • Enhance a youth employment and training programme to assist young people to enter the labour market.


*$=Hong Kong dollar

The Financial Secretary stated that the government’s intention is for expedited implementation of these measures.


KPMG observation

These measures—in particular, the surcharge-free tax instalment payment options—could be beneficial in easing cash-flow situations, although approval of the relief would be on a case-by-case basis. In addition, when taxpayers foresee their taxable profits would be substantially lower (or even in a loss situation) in the year of assessment 2019/20, application for holding over the 2019/20 provisional tax could be a practical solution to help ease their cash-flow situation.  With assessments now being issued, there is a short “window of time” for taxpayers to assess their options because the holdover application must be filed by the later of:

  • 28 days before the due date for payment of the provisional tax, or
  • 14 days after the date of issue of the notice for payment of the provisional tax


For more information contact a KPMG tax professional:

David Ling | +1 609 874 4381 | davidxling@kpmg.com

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