Share with your friends

Hong Kong: Review of tax compliance changes for 2018/19

Hong Kong: Review of tax compliance changes for 2018/19

Taxpayers need to consider the number of recent tax changes in Hong Kong, given the looming tax compliance season for the 2018/19 year of assessment.


Related content

The tax changes may present opportunities for taxpayers through various tax incentives, including the introduction of:

  • A two-tier profits tax regime
  • An enhanced tax deduction for research and development (R&D) expenditure
  • A tax deduction for capital expenses on three types of specified intellectual property (IP) rights
  • Changes to certain preferential tax regimes
  • Extending the profits tax exemption to onshore privately offered open-ended fund companies

The most significant change to Hong Kong tax law, however, is the introduction of a transfer pricing ordinance that formally codified transfer pricing rules and the three-tiered transfer pricing documentation requirement. An important requirement under the new transfer pricing rules is that certain Hong Kong companies will be subject to country-by-country (CbC) reporting requirements even when not the ultimate parent company of a taxpayer reporting group.

Read a March 2019 report prepared by the KPMG member firm in Hong Kong that summarizes these changes and related administrative measures for Hong Kong corporate taxpayers

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal