Hong Kong tax reforms for treasury centres will lure multinationals, mainland firms: PwC The Hong Kong government’s plan to increase tax incentives for corporate treasury centres will be attractive to multinational and mainland firms considering such activities in the city, according to tax experts at PwC. The government is soliciting public comment from late July until September 4 for a range of tax reforms, after which a bill will be submitted to the Legislative Council in the first half of 2027. “Enhancing the relevant tax incentives will not only help attract more enterprises to establish corporate treasury centres in Hong Kong, but it will also inject fresh momentum into Hong Kong’s financial ecosystem,” said Rex Ho, Asia-Pacific financial services tax leader at PwC Hong Kong, in a media briefing on Friday. A corporate treasury centre functions as an internal bank for a company with operations across multiple jurisdictions. It manages group cash flows, financing, investments and risk management, while helping centralise funding activities. Rather than individual business units raising funds separately, a treasury centre can secure financing through bank loans or bond issuance on behalf of the wider group, often at a lower cost. It can also allocate capital more efficiently between subsidiaries and invest surplus cash centrally. Hong Kong is competing with other financial centres, such as Singapore and Dubai, to attract multinationals and mainland Chinese firms to set up corporate treasury centres. The city’s proposed reforms will introduce a two-tier system of tax concessions. Tier one is for smaller firms that need to hire at least two staff in Hong Kong with annual expenses of HK$2 million (US$254,777). Under this tier, the firms qualify for a 50 per cent tax deduction on profits made through interest income and other trading related to treasury operations. Tier two will offer a five-year pre-approval mechanism for large companies with at least HK$100 million in annual revenue and six subsidiaries, provided they spend more than HK$4 million in Hong Kong per year and hire at least two professionals in the city. The approvals can be renewed provided the total spending and hiring numbers increase during each five-year term. “The pre-approval mechanism allows companies to obtain certainty on their tax treatment before establishing operations in Hong Kong,” Ho said. “This will substantially enhance the competitiveness of Hong Kong as a corporate treasury centre,” he said, adding that the city’s tax regime could match those in Singapore and other major markets. Central state-owned enterprises now hold nearly 8 trillion yuan (US$1.1 trillion) in overseas assets across more than 180 countries and regions, spanning over 10,000 projects and entities, according to the State-owned Assets Supervision and Administration Commission. China Mobile, China Railway Rolling Stock Corp and State Power Investment have already set up treasury centres in Hong Kong, taking advantage of the city’s international banking system, deep capital markets, offshore yuan pool and close links with the mainland. Eric Gong, financial services tax partner at PwC Hong Kong, said the consulting firm had recently received strong interest from large corporate clients wanting information on the proposed tax reforms. “We have hosted seminars in Shanghai and Beijing and got hundreds of clients attending,” Gong said. https://www.scmp.com/business/banking-finance/article/3364223/hong-kong-tax-reforms-treasury-centres-will-lure-multinationals-mainland-firms-pwc?pgtype=live (ICE HONG KONG)

Fonte notizia: South China Morning Post