Decoding BEPS 2.0: What This Means for Hong Kong Businesses
Hong Kong is likely to amend its tax regime to align with the OECD’s proposals to ensure that large businesses pay a minimum level of tax of 15%, regardless of where they operate.
At a webinar on 1 September, Ivor Morris, Partner at KPMG, said that the proposals, commonly known as BEPS 2.0, would involve the imposition of a global minimum effective tax rate of at least 15% on groups with a turnover in excess of 750 million euros. He explained that there will be knock-on effects on domestic tax rules from such a global tax reform, as existing tax breaks and incentives in Hong Kong generally result in an effective tax rate for large businesses of below 15%. This means Hong Kong would no longer to be able compete as a low-tax jurisdiction and will have to work on improving its non-tax offerings if it is to remain attractive to international businesses.
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