The Inland Revenue (Amendment) (No. 3) Ordinance 2018 (the Ordinance) was gazetted on 29 March 2018 to implement the two-tiered profits tax rates regime announced in the 2017 Policy Address.
The two-tiered profits tax rate regime will apply to both corporations and unincorporated business commencing from the year of assessment 2018/19.
|Assessable profits||Corporations||Unincorporated businesses|
|First HKD 2 million||8.25%||7.5%|
|Over HKD 2 million||16.5%||15%|
The objective of the regime is to lower the tax burden of small and medium enterprises (SMEs), the application of the two-tiered profits tax rates is limited to only one entity nominated by a ground of connected entities.
For details, please refer to the official website of the Hong Kong Inland Revenue Department.