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Hong Kong's 2020/21 Budget Announced

Hong Kong's 2020-21 Budget Announced

On 26 February 2020, the Financial Secretary of Hong Kong, Mr. Paul Chan, delivered the 2020/21 Budget. Under the theme of "Support Enterprises, Safeguard Jobs, Stimulate the Economy and Relieve People's Burden", the new Budget proposed cash payout and a number of other measures to relieve people's burden and support enterprises.

The measures mainly include:

Support Enterprises and Safeguard Jobs
  • Reducing profits tax for the year of assessment 2019/20 by 100 per cent, subject to a ceiling of HKD 20,000 for each case.
  • Waiving the business registration fees of HKD 2,000 for 2020/21.
  • Waiving the company annual return registration fee of HKD 105 for 2 years (late registration excluded).
  • Introducing a concessionary low-interest loan under the SME Financing Guarantee Scheme, under which 100% guarantee will be provided by the Government. The application period will last for 6 months. The maximum amount of loan is HKD 2,000,000 and. The repayment period is up to 3 years.
  • Waiving rates for non-domestic properties for four quarters of 2020/21, subject to a ceiling of HKD 5,000 per quarter in the first two quarters and a ceiling of HKD 1,5000 per quarter in the remaining two quarters for each rateable non-domestic property.
  • Providing a subsidy to or reducing eligible non-domestic electricity charges and water and sewage charges.
  • Providing a new round of rental subsidy for 6 months to local recycling enterprises; reducing rental by 50 per cent for 6 months for eligible tenants of government properties and land, eligible operators of properties covered by short-term waivers and hirers of civic centers under the Leisure and Cultural Services Department (LCSD); reducing fees and rental for 6 months for cruise lines and existing tenants of the Cruise Terminal.
Stimulating the Economy and Relieving People's Burden
  • Disbursing HKD 10,000 to Hong Kong permanent residents aged 18 or above.
  • Reducing salaries tax and tax under personal assessment for the year of assessment 2019/20 by 100 per cent, subject to a ceiling of $20,000 for each case.
  • Waiving rates in respect of residential properties for 2020/21, subject to a ceiling of HKD 1,500 per quarter for each rateable property.
  • Paying one month's rent for lower income tenants living in public rental units.
  • Providing an extra allowance to eligible social security recipients, equal to one month of the standard rate Comprehensive Social Security Assistance payments, Old Age Allowance, Old Age Living Allowance or Disability Allowance.
  • Paying the examination fees for school candidates sitting for the 2021 Hong Kong Diploma of Secondary Education Examination.

In addition, controlling the epidemic and stabilizing the economy are the most urgent tasks for the government. The government will strengthen the medical system by improving medical services, increasing medical facilities and staff, developing traditional Chinese medicine and providing mental health services.

Moreover, the government will encourage the use of innovative technologies to enhance the diversified development of finance, tourism and trade, and to create a livable and smart city. The measures will come into effect after being reviewed and approved by the Legislative Council.

Summary of Tax Rates, Allowances and Deductions:

Chargeable at Progressive Rates
Tax Band(HK$) Tax Rate
First 50,000 2%
Next 50,000 6%
Next 50,000 10%
Next 50,000 14%
On the remainder 17%
Standard Rate
15%
Allowances HKD
Basic allowance
Single / Separated / Divorced / Widowed 132,000
Married 264,000
Child allowance 1st to 9th child (each):
Year of birth 240,000
Other years 120,000
Dependent parent / Grandparent allowance (Aged 60 or above)
Not residing with taxpayer 50,000
Residing with taxpayer throughout the year 100,000
Dependent parent / Grandparent allowance (Aged 55 to 59)
Not residing with taxpayer 25,000
Residing with taxpayer throughout the year 50,000
Dependent brother / Sister allowance 37,500
Single parent allowance 132,000
Disabled dependent allowance 75,000
Introduce a personal disability allowance for eligible taxpayers 75,000
Deductions HKD
Charitable donation 35% of assessable income
Expenses of self-education 100,000
Home loan interest 100,000
Elderly residential care expense 100,000
Contribution to recognized occupational retirement scheme 18,000
Qualifying Voluntary Health Insurance Scheme Policy Premiums 8,000 per insured person
Limited company (Profits Tax Rate)
Profits of the first HK$2 million 8.25%
Profits above the amount (HK$2 million) 16.5%
Company in Sole Proprietorship or Partnership
Profits of the first HK$2 million 7.5%
Profits above the amount (HK$2 million) 15%
Property Tax Rate
15%

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