Companies in Hong Kong will soon feel the effects of a global tax reform to ensure large corporates pay a minimum level of tax regardless of where they operate.
After years of negotiations, 132 nations have recently reached a historic agreement on the OECD's proposals to impose a global minimum tax rate of 15% on multinational enterprises (MNEs) to address tax challenges arising from a digitalised economy.
The proposals, commonly known as BEPS 2.0, are built on two pillars. The first pillar looks at taxing certain MNEs based on where they conduct business but do not have a taxable presence under existing international tax rules, while the second focuses on the imposition of a global minimum tax to address issues relating to base erosion and profit shifting.
While companies in Hong Kong are currently subject to a 16.5% corporate tax rate, the territorial system as well as existing tax breaks and incentives could result in an effective tax rate lower than 15%.The SAR is also likely to be put under pressure to amend its tax regimes to align with the new international tax rules, which are expected to come into effect in 2023.
Join us on 1 September, when KPMG representative Ivor Morris will analyse the latest developments with the OECD's BEPS 2.0 proposals. He will also share his views on how Hong Kong should react to such a seminal change in global tax reform and what it means for business.
Please refer to the following on the virtual seminar:
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