Technical Highlight   (English version only)

• Taxation
• Companies Ordinance
• HKGAAP

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On 29 December 2017, the Inland Revenue (Amendment) (No. 7) Bill 2017 (Profits Tax bill) was gazette to introduce a two-tiered profits tax rate regime. Starting from the year of assessment 2018/19 (i.e., on or after April 1, 2018), profits earned by a limited company will be taxed at 8.25 percent for the first HK$2 million profits. The remaining profits will continue to be taxed at the existing 16.5% tax rate. (29-12-2017)

According to the policy address 2017, Chief Executive Carrie Lam Cheng Yuet-ngor announced new tax measures to reduce the tax burden on Hong Kong companies, including a two-tiered profits tax system that would lower the profits tax rate to 8.25% (original: 16.5%) on the first $2 million of profit (11 October 2017).

Effective from 1 April 2017, the business registration fee is to be increased from HK$250 to HK$2,250.

Effective from 1 April 2016, the business registration fee is to be decreased from HK$2,250 to HK$250.

Effective from 1 April 2014, the business registration fee is to be increased from HK$250 to HK$2,250.

With effect from 19 July 2013, the levy rate of the Business Registration Certificate, which finances the Protection of Wages on Insolvency Fund, from $450 per annum to $250 per annum.

The Financial Secretary proposed a one-off reduction of profits tax, salaries tax and tax under personal assessment for the year of assessment 2012/13 by 75%, subject to a ceiling of $10,000 per case (April 2013).


In the 2012-13 Budget delivered on 1 February 2012, the Financial Secretary proposed a reduction of 75% of profits tax, salaries tax and tax under personal assessment for the year of assessment 2011-12, subject to a ceiling of $12,000 per case.

Effective from 1 April 2012, the business registration fee is to be reduced from HK$2,450 to HK$450.

The Buinsess Registration Fee has been increased from HK$450 to HK$2,450 for companies commence business on or after 1 August 2011.

The Financial Secretary proposed to increase the allowance for maintaining dependent parents/grandparents by 20 per cent (from HK$30,000 to 36,000).  He also proposed to raise both the child allowance and the additional one-off child allowance in the year of birth by 20 per cent from $50,000 to $60,000 respectively for each child.  (23 February 2011)


Business registration fees will be waived for one year from August 1, 2009. The new fee is HK$450.

The Revenue Bill 2008 was passed by the Legislative in June 2008. (Details)

A 100% deduction under profits tax will be provided in the year of purchase for the capital expenditure incurred on the provision of eligible machinery. The proposal was contained in the Revenue Bill 2008 gazetted on April 25 2008). (Details)

According to the Business Registration Ordinance (Amendment: Levy Reduction) Order 2008. The Business Registration Certificate levy will be reduced from $600 a year to $450 a year with effect from March 14, 2008. (Details)

The interest rate on the tax reserve certificate (TRC) is 0.0375% annually effective from 1 September 2003.

The Inland Revenue Department issued Departmental Interpretation & Practice Notes (DIPN) 41 on Taxation of Holiday Journey Benefits in August 2003.

The Inland Revenue Department issued Departmental Interpretation & Practice Notes (DIPN) 22 (revised) on Section 21A of Inland Revenue Ordinance in July 2003.

The Inland Revenue Department issued Departmental Interpretation & Practice Notes (DIPN) 9 (revised) on Major Deductible Items under Salaries Tax in September 2002 and DIPN 40 on Prepaid or Deferred Revenue Expenses in October 2002.

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To enhance transparency of corporate beneficial ownership in order to meet Hong Kong’s international obligations, the Companies Ordinance is amended to require a company incorporated in Hong Kong to obtain and maintain up-to-date beneficial ownership information (for persons who hold more than 25% shares), by way of keeping a Significant Controllers Register (SCR) - 重要控制人登記冊, for inspection by law enforcement officers upon demand, effective from 1 March 2018.

The company is also required to designate a representative (指定代表人) to serve as a contact point for providing information about the SCR and related assistance to law enforcement officers. The designated representative must be either a shareholder, director or an employee of the company who is a person resident in Hong Kong or an accounting professional, a legal professional or a person licensed to carry on a business as trust or company service provider. The particulars of the designated representative should also be entered into the SCR.

The new Companies Ordinance (Cap. 622), which consists of 921 sections and 11 schedules, have commenced operation on 3 March 2014. It aims to achieve four main objectives, namely, to enhance corporate governance, ensure better regulation, facilitate business and modernize the law. (Details)

The capital duty currently levied on Hong Kong companies under the Companies Ordinance will be abolished effective from 1 June 2012.

The Companies Registry has issued a revised 'Non-statutory Guidelines on Directors' Duties' in 22 October 2008.

With effect from 11 July 2008, provisions concerning incorporation of local companies in the Companies (Amendment) Ordinance 2004 will come into operation. New incorporation forms will be introduced on the same date.

The Companies (Amendment) Ordinance 2003 was passed on 2 July 2003. Major changes include to permit the formation of a private company by one or more persons and to permit a private company to have only one director.

The Companies (Amendment) Bill 2002 sought to implement 17 recommendations raised by the Standard Committee on Company Law Reform.

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New and amended Standards and Interpretations issued that are applicable to accounting periods beginning on or after 1 January 2018. (Details)

New and amended Standards and Interpretations issued that are applicable to accounting periods beginning on or after 1 January 2017. (Details)

Conceptual Framework for Hong Kong Financial Reporting 2010 (Nov 2010)

HKFRS Update – List of new and amended Standards and Interpretations (13-1-2009)

In February 2011, the Hong Kong Institute of Certified Public Accountants published revised the SME Financial Reporting Framework (SME-FRF) and Financial Reporting Standard (SME-FRS) which are standards of accounting practices for SMEs that qualify for reporting under the SME-FRF. (Details)

In December 2004, the Hong Kong Institute of Certified Public Accountants published the following new standards to converge with the International Financial Reporting Standards (IFRS) issued by the IASB effective for accounting periods on or after 1 January 2005:

HKAS 7 Cash Flow Statements
HKAS 17 Leases
HKAS 23 Borrowing Costs
HKAS 24 Related Party Disclosures
HKAS 30 Disclosures in the Financial Statements of Banks and Similar Financial Institutions
HKAS 31 Investments in Joint Ventures
HKAS 40 Investment Property
HKAS 41 Agriculture

In April 2004, the Hong Kong Institute of Certified Public Accountaants has made an important step towards the harmonisation of local accounting standards with the international standards, by announcing its recent approval of a number of new Hong Kong accounting standard (HKAS). These standard will become effective for financial statements covering annual periods that begin on or after 1 January 2005. (Details)