Page 466 - 2018 White Paper on the Business Environment in China
P. 466
8 White Paper on the Business Environment in China
on profits arising in Hong Kong. Hong Kong regulations Air
also allow companies to claim offshore status, allowing
them total tax exemption on profits sourced outside of The Hong Kong International Airport (HKIA) at
Hong Kong. Chek Lap Kok is the busiest airport in the world for
international cargo. In 2016, HKIA handled 70.5 million
All expenditures incurred in the generation of passengers and 4.52 million tons of cargo. By 2040,
assessable profits, including most interest costs, rent efforts to expand the airport will increase its capacity to
for office and factory premises, bad debts, and salaries handle up to 87 million passengers and nine million tons
and payments to approved pension schemes, are of cargo per year. The airport’s marine cargo terminal is
deductible from gross income. Sums paid out on capital linked with 18 ports in the Pearl River Delta.
expenditures are not tax deductible. Losses can be
carried forward without any limits. Rail
Value-added Tax (VAT) and Withholding Tax Recently, five new rail projects expanded Hong
Kong’s network by 35 percent to over 200 kilometers,
VAT is non-existent in Hong Kong. There is also no with an increase in public transit service from 31 percent
withholding tax in Hong Kong for profit repatriated back to 39 percent. The city’s major rail projects include the
to the overseas parent company. 7.4 kilometer extension of the Kowloon-Canton Railway
(KCR) from SheungShui to Lok Ma Chau Spur Line and
Salary Tax the Guangzhou-Shenzhen-Hong Kong Express Rail Link
worth US$8.6 billion.
There are two ways of calculating salary tax in Hong
Kong for the individual taxpayers who have assessable Ports and Waterways
income from employment:
The Hong Kong port handles about three quarters of
(1) Progressive rate Hong Kong’s total cargo throughput and is among the
Taken on a sliding scale (2-17 percent) against the world’s busiest container ports by cargo throughput.
taxpayer’s annual net chargeable income (i.e. less There are nine container terminals in Kwai Chung-Tsing
allowable deduction and personal allowances); and Yi basin under the operation of five different operators,
namely, the Modern Terminals, Hong Kong International
(2) Standard rate Terminals Ltd, COSCO-HIT, DP World and Asia Container
15 percent based on the annual net income (i.e. less Terminals Ltd. There are some 800 shipping-related
allowable deductions only). The final payable income companies in Hong Kong that provide comprehensive
tax is the lower of the two tax liabilities. The maximum maritime services including ship registration, legal and
average tax rate in Hong Kong is thus 15 percent for dispute resolution services, ship financing and marine
the current tax year. Dividends received from any insurance, and ship-ownership and vessel management.
corporation enjoy tax exemption.
Infrastructure
The city is currently undergoing an ambitious
transport infrastructure program, and has a recent
annual budget of HK$15.5 billion to be spent on major
road and railway projects.The entirety of this program
is expected to be completed in 2020. In addition, the
government has allocated HK$85 billion to infrastructure
construction in its 2016/2017 fiscal budget.
466
on profits arising in Hong Kong. Hong Kong regulations Air
also allow companies to claim offshore status, allowing
them total tax exemption on profits sourced outside of The Hong Kong International Airport (HKIA) at
Hong Kong. Chek Lap Kok is the busiest airport in the world for
international cargo. In 2016, HKIA handled 70.5 million
All expenditures incurred in the generation of passengers and 4.52 million tons of cargo. By 2040,
assessable profits, including most interest costs, rent efforts to expand the airport will increase its capacity to
for office and factory premises, bad debts, and salaries handle up to 87 million passengers and nine million tons
and payments to approved pension schemes, are of cargo per year. The airport’s marine cargo terminal is
deductible from gross income. Sums paid out on capital linked with 18 ports in the Pearl River Delta.
expenditures are not tax deductible. Losses can be
carried forward without any limits. Rail
Value-added Tax (VAT) and Withholding Tax Recently, five new rail projects expanded Hong
Kong’s network by 35 percent to over 200 kilometers,
VAT is non-existent in Hong Kong. There is also no with an increase in public transit service from 31 percent
withholding tax in Hong Kong for profit repatriated back to 39 percent. The city’s major rail projects include the
to the overseas parent company. 7.4 kilometer extension of the Kowloon-Canton Railway
(KCR) from SheungShui to Lok Ma Chau Spur Line and
Salary Tax the Guangzhou-Shenzhen-Hong Kong Express Rail Link
worth US$8.6 billion.
There are two ways of calculating salary tax in Hong
Kong for the individual taxpayers who have assessable Ports and Waterways
income from employment:
The Hong Kong port handles about three quarters of
(1) Progressive rate Hong Kong’s total cargo throughput and is among the
Taken on a sliding scale (2-17 percent) against the world’s busiest container ports by cargo throughput.
taxpayer’s annual net chargeable income (i.e. less There are nine container terminals in Kwai Chung-Tsing
allowable deduction and personal allowances); and Yi basin under the operation of five different operators,
namely, the Modern Terminals, Hong Kong International
(2) Standard rate Terminals Ltd, COSCO-HIT, DP World and Asia Container
15 percent based on the annual net income (i.e. less Terminals Ltd. There are some 800 shipping-related
allowable deductions only). The final payable income companies in Hong Kong that provide comprehensive
tax is the lower of the two tax liabilities. The maximum maritime services including ship registration, legal and
average tax rate in Hong Kong is thus 15 percent for dispute resolution services, ship financing and marine
the current tax year. Dividends received from any insurance, and ship-ownership and vessel management.
corporation enjoy tax exemption.
Infrastructure
The city is currently undergoing an ambitious
transport infrastructure program, and has a recent
annual budget of HK$15.5 billion to be spent on major
road and railway projects.The entirety of this program
is expected to be completed in 2020. In addition, the
government has allocated HK$85 billion to infrastructure
construction in its 2016/2017 fiscal budget.
466
