Submissions and Reports

It is crucial to accelerate the expansion of Hong Kong’s tax treaty network to enhance our attractiveness as a preferred destination for international business operations amid evolving global tax landscapes. We are hopeful that meaningful progress can be made in the short term by actively engaging with the jurisdictions listed in the attached document. Furthermore, we highly recommend that the Government allocate additional resources to expedite the process.

The Chamber supports the proposed enhancements to the preferential tax regimes for the asset and wealth industry. These enhancements are crucial for maintaining Hong Kong’s competitiveness as a global financial hub. We believe, however, that there is still room for further refinements to the proposed measures. We suggest, among others, expanding the definition of qualified assets and applying these enhancements on a retrospective basis.

The Chamber strongly advocates for greater collaboration with the international community in enhancing tax transparency and combating tax evasion amid the growing digitalisation of the economy. With the imminent implementation of the GloBE rules and the complexity they entail, we urge the Government to provide comprehensive guidance on all facets of the new rules to assist businesses in their compliance efforts.

The Chamber firmly believes in the critical importance of expanding Hong Kong’s tax treaty network and has put forward a number of suggested jurisdictions in response to an invitation from the Financial Services and the Treasury Bureau. We hold high hopes that substantive progress can be achieved in the near term by actively engaging the jurisdictions. Additionally, we highly recommend that the Government allocate additional resources to expedite the process.

The Chamber welcomes and supports the proposals to introduce a patent box tax incentive in Hong Kong as this would encourage businesses to engage in more R&D and IP trading activities in the city. To further strengthen Hong Kong’s tax competitiveness as an international innovation and technology centre, and a regional IP trading centre, we suggest that consideration should be given to such aspects as taxing IP income at a lower rate, as well as widening the scope of eligible IP-related asset and income.

The Chamber suggests that the source of disposal gains should be determined based on the location or jurisdiction where relevant economic activities were carried out, providing greater clarity for businesses and aligning with principles of source-based taxation.

The Chamber welcomes the Government’s initiative to update the Talent List to address Hong Kong’s acute talent shortage situation and sustain a competitive economy, and puts forward recommendations on the necessary high-skilled professions for inclusion in the same.

The Chamber feels strongly about the need to scale up Hong Kong’s tax treaty network and has put forward a number of suggested jurisdictions in response to an invitation from the Financial Services and the Treasury Bureau. With the recent lifting of Covid-related restrictions, we are hopeful that substantive progress would be made in the near term to engage the prospective jurisdictions.

The Chamber welcomes the HKLRC’s proposals to introduce a bespoke law that deals with the proliferation of cyber-dependent crimes given the risks of such illegal acts on Hong Kong’s businesses. The Chamber has also called for a balanced approach in the design of the new law so that other than the objective of protecting public interest, consideration should also be given to upholding business’ legitimate needs.

The Chamber supports the Government’s efforts to remove Hong Kong from the European Union’s watchlist by introducing changes to our FSIE regime while upholding the key principles of our taxation policy. However, more clarity should be provided on certain issues including the interpretation and application of covered income and economic substance requirement, as well as the eligibility criteria for the proposed participation exemption.