Today (Feb 26), HK Financial Secretary announced the 2020-21 Hong Kong Budget, a series of measures, outlining the government's plan for the economy and proposals for the taxation developments.
First thing first, here's a brief of the current epidemic situation so far as of Wednesday afternoon according to DingXiangYiSheng:
Confirmed cases: 80,994 worldwide
Deaths: 2,763, mostly in Hubei
Recovered cases: 30,100
Incubation period: no more than 14 days
6 provinces lower emergency response level
△ Epidemic map made by DingXiangYiSheng
Hong Kong is to announce plans for its largest budget deficit in at least a decade to cushion the shock of protests and the coronavirus outbreak on the reccession-hit economy.
Many companies in the tourism and retail sectors are struggling to survive as a partial closure of the border reduces visitor arrivals to a trickle and keeps residents away from public areas.
Carrie Lam, the Chinese-ruled city's leader, has already proposed measures worth HK$30 billion ($3.85 billion) to help small and medium-sized companies and low-income households cope with the health crisis.
A series of measures have been proposed to ease the burden, according to the budget presented by the Financial Secretary Paul Chan.
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HK$10,000 Cash for Residents
Every Hong Kong permanent resident aged above 18 will receive HK$10,000 in cash, while the government also offers 100 per cent guarantee to Hong Kong companies taking low interest loans.
Individuals will receive rebates in salary and property tax, other government fees and a month of lower public housing rent.
The monthly allowance for low income families will be doubled and fees waived for public examinations to get into universities.
Lower profit tax for companies, government rents and rates to be reduced, electricity bills will be subsidised.
For most of our friends, tax can be the first to concern about. In brief, HK will reduce profits tax, waive rates for non-domestic properties and business registration fees, and provide a one-off special allowance.
According the Budget delivered today, the Financial Secretary proposed following tax measures:
He proposed a one-off reduction of profits tax, salaries tax and tax under personal assessment for the year of assessment 2019-20 by 100 per cent, subject to a ceiling of HK$20,000 per case.
This measures will benefit about 2.09 million taxpayers and cost government HK$20.8 billion.
The tax reduction will reduce the amount of tax payable by taxpayers for the year of assessment 2019-20. Taxpayers should file their profits tax returns and tax returns for individuals for the year of assessment 2019-20 as usual. Upon enactment of the relevant legislation, the Inland Revenue Department will effect the reduction in the final assessment.
The proposed tax reduction will only be applicable to the final tax for the year of assessment 2019-20, but not to the provisional tax of the same year.
Therefore, despite the proposed reduction, taxpayers are still required to pay the provisional tax on time as stipulated in the demand notes that have been issued to them.
The provisional tax paid will, in accordance with the Inland Revenue Ordinance, be applied in payment of the final tax for the year of assessment 2019-20 and provisional tax for the year of assessment 2020-21. Excess balance, if any, will be refunded.
The proposed tax reduction is not applicable to property tax. Nevertheless, individuals with rental income, if eligible for personal assessment, may be able to enjoy such reduction under personal assessment.
A taxpayer who is separately chargeable to salaries tax and profits tax can enjoy tax reduction under each of the tax types.
For a taxpayer having business profits or rental income and electing for personal assessment, the reduction will be based on the tax payable under personal assessment.
It might be different from the amount of tax reduction he or she would get if he or she was not assessed under personal assessment. The exact position will need to be evaluated case by case.
Individuals having business profits or rental income may elect for personal assessment in their tax returns for the year of assessment 2019-20.
The Financial Secretary also proposed to waive the business registration fees for 2020-21.
The above proposed tax measures will be effected by amending the relevant ordinances. Details of the proposals and examples of tax calculations are available on the official website. Also, you are welcome to contact us to get more info!
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Lots of measures and policies have been adjusted and taken due to the epidemic situation. We will post a series of articles about latest policies and solutions. Stay tuned.
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SOURCE | HK Gov / Reuters / SCMP
