Hong Kong to woo finance and tech firms with new tax breaksHong Kong will introduce various tax incentives for new finance and technology industries to attract businesses and reinforce the city’s role as a leading financial hub, the city leader has announced in his policy address.Tax concessions to draw intellectual property (IP) businesses and selected industries to the city were among the new measures Chief Executive John Lee Ka-chiu announced on Wednesday, while the halving of the profits tax rate for gold traders would be sped up.To speed up the growth of Hong Kong’s international gold trading market, the city will push to slash the profits tax rate for qualifying physical commodity traders from the standard 16.5 per cent to 8.25 per cent by next year.The aim was to attract more commodity traders to set up or expand their businesses in Hong Kong, Lee said.With the official launch of Hong Kong’s central clearing and settlement system for gold in the first quarter of 2027, financial authorities also aim to explore providing tax concessions for qualifying activities within the gold and commodity trading ecosystem for consultation with the Legislative Council next year.Since the London Metal Exchange (LME) included Hong Kong in its global warehousing network last year, the city’s storage area has exceeded 60,000 square metres, with an inventory of more than 20,000 tonnes of the metal to date.The city in July launched a trial gold clearing and settlement system involving 11 Chinese and international banks, including introducing a two-way physical gold transfer mechanism, dubbed Delivery Connect, linking the local market with Shanghai.This is in line with the national policy to establish a commodity trading ecosystem.Separately, to attract businesses to set up corporate treasury centres and sourcing centres, the Financial Services and the Treasury Bureau plans to introduce an amendment bill to provide preferential tax rates to certain industries to Legco by the end of this year.“A tax concession of 5 per cent or half rate may be offered under the preferential policy packages on attracting enterprises and investments, depending on the investment plan of individual enterprises and their actual contribution to Hong Kong’s economy,” Lee said.These include enterprises in key sectors such as finance, advanced manufacturing, research and development in I&T, headquarters activities and logistics and supply-chain management.A government source said this applied to sizeable companies that authorities would like to invite to set up shop in, or “steal”, to Hong Kong, if they asked for a lower tax rate as a condition for relocating.Criteria include the investment size, the number of staff to be recruited in the city and economic contribution. Although the Inland Revenue Department is responsible for this initiative, the company will also need to seek support from the relevant bureau for its industry.For example, an aviation company needed support from the Transport and Logistics Bureau, while large finance firms should be supported by the Financial Services and the Treasury Bureau, the source added.For the IP industry, the government will introduce a bill this year to implement tax deduction arrangements for capital expenditure incurred in purchasing IP rights, or for the licence to use IP rights, to support developing Hong Kong into a regional IP trading centre.According to the source, when the measures are implemented, the costs will be deducted from the buyer’s revenue when calculating profit, which acts as a tax allowance.This applies even if the buyer is an associate company of the seller, if they can prove they were not evading tax or the amount involved is not unreasonably high.The aim is to encourage more buying and management of IP. For example, a company can group all its IP under one subsidiary, which can be costly now, according to the source.Hong Kong protects eight major forms of IP – patents, trademarks, designs, copyright, trade secrets, plant varieties, performances and integrated circuit layout designs.Currently, the IP industry accounts for about 30 per cent of Hong Kong’s gross domestic product and jobs.https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3367754/hong-kong-woo-finance-and-tech-firms-new-tax-breaks?pgtype=live (ICE HONG KONG)

Fonte notizia: South China Morning Post