• News Update

Disclaimer

The general tax information on the above content is provided for your ease reference and is not intended to replace any tax advice or other professional advice. Clients should clearly acknowledge and confirm that final decision is reserved by Hong Kong Inland Revenue Department through its tax assessment process. In the event of any inconsistency between the English and Chinese versions of this content, the English version shall prevail.

Economic Outlooks for 2019

Source : The 2019-20 Budget (https://www.budget.gov.hk/2019/eng/io.html)

  • Forecast GDP growth in real terms at 2% to 3%
  • Forecast headline inflation is 2.5% and underlying inflation is 2.5%.

Major Proposed Measures

Tax Concessions and One-off Measures

Profits Tax

  • Reduce profits tax for the Year of Assessment (“YOA”) 2018/19 by 75%, subject to a ceiling of HKD 20,000;

Salaries Tax

  • Reduce salaries tax and tax under personal assessment for the YOA 2018/19 by 75%, subject to a ceiling of HKD 20,000;

Rate

  • Waive rates for the FOUR quarters of the YOA 2019/20, subject to a ceiling of HKD 1,500 per quarter, for each ratable property.

Others

  • Provide an extra allowance to 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. Similar arrangements will apply to Low-income Working Family Allowance and Work Incentive Transport Subsidy;
  • Provide each student in need a one-off grant of HKD 2,500 to support learning;
  • Pay the examination fees for candidates sitting for the 2020 Hong Kong Diploma of Secondary Education Examination; and
  • Provide, on a one-off basis, an additional HKD 1,000 worth of vouchers to the elderly eligible for the Elderly Health Care Voucher Scheme. The accumulation limit of vouchers will also be raised from HKD 5,000 to HKD 8,000 to allow users greater flexibility. The Food and Health Bureau is reviewing the Scheme to ensure that it can better serve the needs of the elderly. The findings will be announced upon completion of the review.

Tax Policy

  • Transfer the Tax Policy Unit, currently under the Financial Services and the Treasury Bureau, to come directly under the Financial Secretary's Office.
  • To bring the total number of Comprehensive Avoidance of Double Taxation Agreements to 50 in the next few years.

Financial Services Industry

Green Finance

  • Inaugural issuance of government green bonds and will encourage the relevant sectors to incorporate green elements into corporate governance and operation in a more effective manner.

Financial Technologies

  • The Hong Kong Monetary Authority (“HKMA”) will shortly issue virtual banking licences. Banks will also implement the Open Application Programming Interface functions in phases. These will bring more innovative banking services to the public. The Insurance Authority also approved the first authorisation of virtual insurers last December, marking a new chapter for insurance technology development in Hong Kong.
  • On the regulatory front, the Securities and Futures Commission ("SFC") announced a new regulatory approach for virtual assets in November 2018 with a view to exploring ways for encouraging market innovation while protecting investors. Moreover, the HKMA and the SFC are making use of the Global Financial Innovation Network to share with other regulators the experience and knowledge in relation to the supervision of Fintech applications.

Innovation and Technology

  • Earmark HKD 5.5 billion for the development of Cyberport 5 in order to attract more quality technology companies and start-ups to set up their offices in Cyberport and provide a pathway for young people to pursue a career in I&T.
  • Proposed to allocate an additional HKD 2 billion for the Hong Kong Science and Technology Parks Corporation to build dedicated facilities required by the advanced manufacturing sector in industrial estates to facilitate more manufacturers to set up operations in Hong Kong.

International Transportation Centre

  • Offer 50% profits tax concession to eligible insurance businesses including the marine insurance industry.

Creative Industries

  • To inject another HKD 1 billion into the Film Development Fund in 2019-20 to help the local film industry thrive further.

Land Resources

  • Set aside HKD 2 billion to support non-government organizations in constructing transitional housing.
  • Set aside about HKD 22 billion to take forward the first batch of projects under the "single site, multiple use" initiative, which will include redevelopment of Tuen Mun Clinic, development of a proposed ambulance depot near Sheung Wan Fire Station, and consolidation of several government sites in Tsuen Wan town centre.

Healthcare

  • Provide additional recurrent funding of over HKD 700 million for the Hospital Authority (“HA”) to introduce the following measures:
    1. increasing the rate of allowance for on-call medical officers, the rate of Special Honorarium Scheme allowance and the salary of ward supporting staff;
    2. increasing the number of Advanced Practice Nurse posts to enhance evening ward services;
    3. increasing the number of allied health professional posts to improve promotion prospects; and
    4. allocating additional resources to continue implementing the Special Retired and Rehire Scheme.
  • To allocate about HKD 1.2 billion to establish the Hong Kong Genome Institute and take forward the Hong Kong Genome Project, under which 40,000 to 50,000 whole genome sequencing will be performed in the next six years.

Welfare Facilities

  • Allocate HKD 20 billion for the purchase of 60 properties for accommodating more than 130 welfare facilities, including day child care centres, neighbourhood elderly centres, on-sitepre-school rehabilitation services, etc.,

Elderly Services

  • To provide an additional one-off HKD 1,000 worth of Elderly Health Vouchers to benefit elderly persons.

Child and Youth Services

  • To allocate an additional funding of about HKD 156 million from 2019-20 onwards to increase the level of subsidy for services provided by child care centres to alleviate parents' financial burden; improve the manning ratio of qualified child care workers in day and residential child care centres and enhance training to improve service quality
  • To implement the measure of "two school social workers for each school" in more than 460 secondary schools in Hong Kong from the 2019/20 school year, and increase supervisory manpower accordingly for enhancing teenagers’ mental health and stress resilience.

Social Enterprises

  • To provide an additional funding of HKD 150 million for the ongoing operation of the Self-Reliance Through District Partnership Programme.

Detailed Version of Our Smmary

Please visit [ pdf version ] for detailed version of our summary on the Hong Kong 2019-20 Budget.

Further Information

The above information is mainly extracted from the website of the “The Hong Kong 2019-20 Budget”.

Please visit "The Hong Kong 2019-20 Budget" or contact our Tax Service Department (email: tax@atrixbiz.com) for further details.

Reference

The Hong Kong 2019-20 Budget
[ 27th February 2019 ]

NOTICE
Holiday Notice: The first day of January 2019
Please note that Atrix will be closed on 1 January (Tuesday), and our service to be resumed on 2 January (Wednesday).

Waiving business registration fees for 2019/20
In Hong Kong 2019-20 Budget, the Financial Secretary proposed a waiver of 2019/20 business registration fees of HKD 2,000.   Read more

The Hong Kong 2019-20 Budget Summary
The Financial Secretary of the HKSAR Government will provide new resources ready for use of about HKD 150 billion in the 2019-20 Hong Kong Budget, with additional resources earmarked for various purposes.   Read more