In view of the COVID-19 outbreak, Hong Kong Government has announced several tax relief measures in order to help Hong Kong companies to overcome financial difficulties.
1. Reducing profits tax, salaries tax and tax under personal assessment for the year of assessment 2019/20
A one-off reduction of profits tax, salaries tax and tax under personal assessment for the year of assessment 2019/20 by 100%, subject to a ceiling of HKD 20,000 per case. The relevant legislation for the tax reduction was passed by the Legislative Council and gazetted on 19 June 2020.
2. Tax exemptions in respect of relief measures under the Anti-epidemic Fund
The payments in respect of grants, subsidies or other financial assistance provided under the Anti-epidemic Fund, such as subsidy under the ESS(Employment Support Scheme) and funding under the D-Biz Programme(Distance Business Programme), are exempted profits tax.
3. Conditional waiver of surcharges for instalment settlement of demand notes for the year of assessment 2019/20
For instalment plans approved by the Inland Revenue Department allowing taxpayers in financial difficulties for settlement of salaries tax, profits tax and personal assessment demand notes issued between August 2020 and August 2021 for the year of assessment 2019/20, no surcharge will be imposed for a maximum period of one year counting from the respective due dates of the demand notes provided that the instalment plans are duly adhered to.
Besides, as a regular measure, taxpayers can apply for holding over of provisional profits tax if their assessable profits for the year of assessment are, or are likely to be, less than 90% of the assessable profits for the year preceding the year of assessment or the estimated sum in respect of which they are liable to pay provisional profits tax.
*Source: Inland Revenue Department