News

Company Secretary
• Waiver of BR fee for the period from 1 April 2021 to 31 March 2022

The Revenue (Reduction of Business Registration Fees and Branch Registration Fees) Order 2021 (“the Order”) comes into operation on 1 April 2021.
By the Order, the fees payable under section 5A(1)(a) of the Business Registration Ordinance (Cap. 310) in respect of local companies registered under the one-stop company incorporation and business registration regime (“One-stop Registration”) will be reduced by a sum of $2,000 if the related incorporation submissions are made within the period from 1 April 2021 to 31 March 2022 (“the Waiver Period”). For other cases, the fees payable in respect of business registration certificates and branch registration certificates with commencement date falling within the Waiver Period will be reduced by a sum of $2,000 and $73 respectively

• Waiver of AR fee

Pursuant to the Companies (Fees) (Amendment) Regulation 2020 which came into operation on 1 October 2020, the registration fees for annual returns delivered to the Companies Registry on time and within the concession period from 1 October 2020 to 30 September 2022 (both dates inclusive) has been waived for two years.  In cases of late delivery of annual returns, waiver of fees is not applicable and companies are still required to pay the statutory higher registration fees calculated based on the date of delivery, even though the late annual returns are delivered within the concession period.

Taxation
• Profit tax: 2 tier tax rate
The Inland Revenue (Amendment) (No. 3) Ordinance 2018 was enacted on 29 March 2018. The amendment ordinance has introduced two-tiered profits tax rates for corporations and unincorporated businesses by lowering the tax rate for the first $2 million of assessable profits with effect from the year of assessment 2018/19. However, for two or more connected entities, only one of them may elect the two-tiered profits tax rates. 
• Salaries tax: tax allowance for 2020/21 & 2020/21 onwards
1. Allowances
HK$
Basic Allowance
132,000
Married Person’s Allowance
264,000
Child Allowance
120,000
Additional Child Allowance (for each child born during the year)
120,000
Dependent Brother and Sister Allowance (for each dependant)
37,500
Dependent Parent Dependent Grandparent Allowance (for each dependant)

• Parent / grandparent aged 60 or above or is eligible to claim an allowance

50,000
• Parent / grandparent aged 55 or above but below 60
25,000
Additional Dependent Parent Dependent Grandparent Allowance (resided with depedant continuously throughout the year of assessment.)

• Parent / grandparent aged 60 or above or is eligible to claim an allowance

50,000
• Parent / grandparent aged 55 or above but below 60
25,000
Single Parent Allowance
132,000
Personal Disability Allowance
75,000
Disabled Dependant Allowance (for each dependant)
75,000

2. Maximum deductions limits

Self-Education Expenses
100,000
Elderly Residential Care Expenses
100,000
Home Loan Interest
100,000
Madatory Contributions to Recognized Retirement Schemes
18,000
Qualifying Premiums Paid under Voluntary Health Insurance Scheme (VHIS)
8,000
Qualifying Annuity Premiums and Tax Deductible MPF Voluntary Contributions
60,000
Approved Charitable Donations
[(Income – Allowable Expenses – Depreciation Allowances) x %]
35%

• Reducing profits tax, salaries tax and tax under personal assessment for the year of assessment 2020/21

The Financial Secretary proposed a one-off reduction of profits tax, salaries tax and tax under personal assessment for the year of assessment 2020/21 by 100%, subject to a ceiling of $10,000 per case.  The relevant legislation for the tax reduction was passed by the Legislative Council and gazetted on 7 May 2021.
For profits tax, the ceiling of the tax reduction is applied to each business. For salaries tax, the ceiling is applied to each individual taxpayer; but for married couples jointly assessed, the ceiling is applied to each married couple (i.e. capped at $10,000 in total). For personal assessment, the ceiling is applied to each single taxpayer or married person who elects for personal assessment separately from his/her spouse. If a taxpayer elects for personal assessment jointly with his/her spouse, the tax reduction is capped at $10,000 for the married couple
The tax reduction is not applicable to property tax. 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/she would get if he/she was not assessed under personal assessment. The exact position will need to be evaluated case by case.
To elect for personal assessment, eligible taxpayers should complete Part 7 of his/her tax return for individuals (BIR60) for the year of assessment 2020/21. Individuals having salaries income only, but no business profits and rental income, need not elect for personal assessment.
The reduction will reduce taxpayers’ amount of tax payable for the year of assessment 2020/21. Taxpayers should file their profits tax returns and tax returns for individuals for the year of assessment 2020/21 as usual. The Inland Revenue Department will effect the reduction in the final assessment. For any final assessment for the year of assessment 2020/21 issued before the enactment of the law, the Inland Revenue Department will make a reassessment. Taxpayers are not required to make any applications or enquiries to the Department.
The tax reduction will only be applicable to the final tax for the year of assessment 2020/21, but not to the provisional tax of the same year. Therefore, taxpayers are still required to pay their provisional tax on time despite the reduction measure. The provisional tax paid will be applied to pay the final tax for the year of assessment 2020/21 and the provisional tax for the year of assessment 2021/22. Excess balance, if any, will be refunded.