SYNOPSIS OF HONG KONG 2015/16 BUDGET

Transcription

1 PKF Tax and Business Consultants Limited 大信梁學濂稅務及商務咨詢有限公司 Tax & Business Consultants SYNOPSIS OF HONG KONG 2015/16 BUDGET 25 February 2015 A. ECONOMIC REVIEW AND OUTLOOKS Economic forecast indicator GDP growth is between 1% and 3%. Headline inflation is 3.5% and underlying inflation is 3%. Recurrent expenditure has kept increasing, increasing with 6% Source : The Budget ( Tel: (852) Fax: (852) info@pkf-hk.com Website:

2 B. Major PROPOSED MEASURES Tax Concessions and One-off Measures Reduce profits tax, salaries tax and tax under personal assessment for 2014/15 by 75%, subject to a ceiling of HK$20,000. Increase the basic and additional child allowances from HK$70,000 to HK$100,000 from 2015/16 onwards. Waive rates for the first two quarters, subject to a ceiling of HK$2,500 per quarter, for each rateable property. Provide an extra allowance to Comprehensive Social Security Assistance ( CSSA ) recipients, equal to two months of the standard rate CSSA payments, and an extra allowance to the recipients of Old Age Allowance, Old Age Living Allowance and Disability Allowance, equal to two months of the respective allowances. Pay one month's rent for lower income tenants living in the rental units of the Hong Kong Housing Authority and the Hong Kong Housing Society. Targeted support measures Due to the Occupy Central, launching the following short-term measures to support the affected sectors:- Waive the licence fees for travel agents for six months. Waive the licence fees for hotels and guesthouses for six months. Waive the licence fees for restaurants and hawkers and fees for restricted food permits for six months. Waive the fees for vehicle examination once for the renewal of vehicle licences of taxis, light buses, franchised and non-franchised buses, goods vehicles, trailers and special purpose vehicles within a year. Rebuilding investors and tourists confidence to Hong Kong Allocate an additional HK$80 million for Hong Kong Tourism Board to step up its promotion efforts in the coming year. Expand the scale of overseas promotion fairs this year and waive local traders' participation fees. Allocate an additional HK$26 million to the Information Services Department for overseas promotion. Support for Small and Medium Enterprises ( SME ) Extend the application period for the special concessionary measures under the SME Financing Guarantee Scheme to 29 February Inject HK$1.5 billion into the SME Export Marketing and Development Funds. Increase the maximum amount of funding support for each project under the SME Development Fund from HK$2 million to HK$5 million; Expand the scope of the SME Export Marketing Fund. Support for Diversified Industry Development - Start-ups Propose injection of HK$5 billion to the Innovation and Technology Fund. Extend the Leading Enterprises Acceleration Programme. Support for Diversified Industry Development - Social Enterprises Earmark HK$150 million to roll out a new phase of the Enhancing Self-Reliance Through District Partnership Programme from 2016/17 to 2019/20. Tel: (852) Fax: (852) info@pkf-hk.com Website:

3 Support for Diversified Industry Development - Cultural and Creative Industries Inject an additional HK$400 million into the CreateSmart Initiative to support different sectors of the creative industries. Fashion Industry Consolidate HK$500 million, to launch a series of measures on a pilot basis in the next three years in order to promote Hong Kong's fashion industry. Film Industry Injection of HK$200 million into Film Development Fund, enhance its funding arrangements and introduce a subsidy scheme for film productions with a budget not exceeding HK$10 million, subject to a subsidy ceiling of HK$2 million. Raise the production budget ceiling of the Scheme for Financing Film Production from HK$15 million to HK$25 million. Relaunch the First Feature Film Initiative with increased subsidies on production costs to identify new talent for the film industry. Art and Culture Launch a HK$300 million Art Development Matching Grants Pilot Scheme, under which the amount of private donation and sponsorship secured by eligible local arts groups will be matched by grants. Support for Tourism Work with neighbouring cities to promote multi-destination tourism for overseas visitors. Discuss with the Walt Disney Company the Phase 2 development of the Hong Kong Disneyland Resort. Suggest to facilitate alfresco dining operation, and to consider introducing Food Trucks to Hong Kong. Support for Business and Professional Services Propose to deepen the liberalisation measures and extend them nationwide, thereby achieving basic liberalisation of trade in services between the entire Mainland and Hong Kong by the end of this year. Earmark HK$23 million in the coming three years for offering Intellectual Property ( IP ) consultation, manpower training and other services to SMEs. Consider extending tax deduction for capital expenditure incurred on the purchase of IP rights to cover more types of IP rights as appropriate. Support for Financial Services Industry Propose to require financial institutions to report to the Inland Revenue Department specified financial account information on a regular basis, so that Hong Kong can exchange such information with other jurisdictions by end Propose to further increase the investment quota for the RMB Qualified Foreign Institutional Investors (RQFII) Scheme. Propose to allow private equity funds to enjoy profits tax exemption available to offshore funds. Propose to amend the Inland Revenue Ordinance to allow, under specified conditions, interest deductions under profits tax for corporate treasury centres and reducing profits tax for specified treasury activities by 50 per cent. Issue ibond worth up to HK$10 billion. Tel: (852) Fax: (852) info@pkf-hk.com Website:

4 C. MAJOR TAX RATES FOR THE YEARS 2014/15 AND 2015/16 1. Salaries Tax Personal tax allowances and deductions: Basic allowances : 2015/ /15 HK$ HK$ Single person s allowance 120, ,000 Married person s allowance 240, ,000 Additional allowances : Child - Basic 100,000 70,000 - Additional (in the year of birth) 100,000 70,000 Dependent parent / grandparent: a. Aged 55 to 59 - Basic 20,000 20,000 - Additional 1 20,000 20,000 b. Aged 60 or above - Basic 40,000 40,000 - Additional 1 40,000 40,000 Dependent brother / sister 2 33,000 33,000 Single parent 120, ,000 Disabled dependant 66,000 66,000 Additional deductions : Self-education expenses 3 80,000 80,000 Home loan interest 4 100, ,000 Elderly residential care expenses 80,000 80,000 Contributions to retirement schemes 15,000 15,000 Approved charitable donations 5 35% 35% Notes: 1. For dependant living with taxpayer. 2. For whom no child allowance is being claimed. 3. The maximum amount that can be claimed as deductible expense for training courses attended at approved institutions. 4. The entitlement period for tax deduction is 15 years. 5. The maximum deduction allowable is restricted to 35% of the taxpayer s assessable income after deduction of allowable expenses and depreciation allowance. Tel: (852) Fax: (852) info@pkf-hk.com Website:

5 Standard salaries tax rates: 2014/15 and 2015/16 Standard tax rates 15% Progressive salaries tax rates: Net Chargeable Income 2014/15 and 2015/16 First HK$40,000 2% Next HK$40,000 7% Next HK$40,000 12% Remainder 17% 2. Profits Tax Business Category 2014/15 and 2015/16 Unincorporated Business 15% Corporation 16.5% 3. Property Tax Taxpayer 2014/15 and 2015/16 Property Owner 15% 4. Stamp Duty Shares transactions: Nature of Document 2014/15 and 2015/16 Contract Note for sale or purchase of any Hong Kong stock Transfer operating as a voluntary disposition inter vivos Transfer of any other kind 0.1% of the amount of the consideration or of its value on every sold note and every bought note $ % of the value of the stock $5 * Effective from 13 February 2015, stamp duty is waived for the transfer of shares or units of all exchange traded funds ( ETFs ). Tel: (852) Fax: (852) info@pkf-hk.com Website:

6 Property transactions : Sales Consideration 2014/15 and 2015/16 Up to HK$2,000, % HK$2,000,001 to HK$2,176,470 HK$30, % of excess over HK$2M HK$2,176,471 to HK$3,000, % HK$3,000,001 to HK$3,290,330 HK$90, % of excess over HK$3M HK$3,290,331 to HK$4,000, % HK$4,000,001 to HK$4,428,580 HK$180, % of excess over HK$4M HK$4,428,581 to HK$6,000, % HK$6,000,001 to HK$6,720,000 HK$360, % of excess over HK$6M HK$6,720,001 to HK$20,000, % HK$20,000,001 to HK$21,739,130 HK$1,500, % of excess over HK$20M Exceeding HK$21,739, % With effect from 20 November 2010, any residential property acquired on or after 20 November 2010, either by an individual or a company (regardless of where it is incorporated), and resold within 24 months (the property was acquired on or after 20 November 2010 and before 27 October 2012) or 36 months (the property was acquired on or after 27 October 2012), will be subject to a Special Stamp Duty ( SSD ). SSD is calculated by reference to the stated consideration or the market value of the property (whichever is the higher), at the following rates for different holding periods of the property by the seller or transferor before disposal - Holding period The property was acquired on or after 20 November 2010 and before 27 October 2012 The property was acquired on or after 27 October months or less 15% 20% More than 6 months but for 12 10% 15% months or less More than 12 months but for 24 5% 10% months or less More than 24 months but for 36 months or less - 10% With effect from 27 October 2012, unless specifically exempted, Buyer's Stamp Duty ( BSD ) is payable on an agreement for sale or a conveyance on sale executed for the acquisition of any residential property. BSD is charged at 15% on the stated consideration or the market value of the property (whichever is the higher). The Stamp Duty (Amendment) (No. 2) Ordinance 2014 ( Amendment Ordinance ) was gazetted on 25 July The Amendment Ordinance provides that the ad valorem stamp duty ( AVD ) payable on certain instruments dealing with immovable properties executed on or after 23 February 2013 ( the Effective Date ) shall be computed at higher rates (Scale 1). It also advances the timing for charging AVD on non-residential property transactions from the conveyance on sale to the agreement for sale executed on or after the Effective Date. Under the Amendment Ordinance, any residential property and non-residential property acquired on or after the Effective Date, either by an individual or a company, will be subject to AVD at Scale 1, except that acquired by a Hong Kong Permanent Resident acting on his/her own behalf and does not own any other residential property in Hong Kong at the time of acquisition. Tel: (852) Fax: (852) info@pkf-hk.com Website:

7 Leases: Leasing period 2014/15 and 2015/16 Not defined or is uncertain 0.25% Specified in the lease as not exceeding 1 year 0.25% Exceeding 1 year but not exceeding 3 years 0.50% Exceeding 3 years 1.00% 5. Estate Duty The Government had abolished the Estate Duty with effect from 11 February 2006 pursuant to the Revenue (Abolition of Estate Duty) Ordinance D. FURTHER INFORMATION The above information is mainly extracted from the website of the The Hong Kong Budget. Please visit or contact our PKF Tax and Business Consultants Limited for further details. Information included in this publication are for general reference only. They are not intended to be used, and cannot be used, for avoiding tax and penalty that may be imposed by any tax authorities. Before conducting business and tax plan, professional advice is always recommended. We are a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. Tel: (852) Fax: (852) info@pkf-hk.com Website: