The Financial Services & the Treasury Bureau and the Inland Revenue Department today launched a public consultation on proposed enhancements to the tax concession regime for corporate treasury centres (CTCs).
The consultation paper proposes introducing a two-tiered regime for CTC tax concessions.
Under Tier 1, the Government seeks to refine existing tax concessionary measures for qualifying CTCs and intra-group financing businesses operating in Hong Kong.
Tier 2 introduces a pre-approval mechanism allowing eligible CTCs and their associated corporations that meet specified conditions to access additional tax benefits or flexibilities over a five-year validity period, subject to Inland Revenue Department approval.
Secretary for Financial Services & the Treasury Christopher Hui highlighted the consultation as a major initiative to revamp the tax regime and a significant step towards implementing the “Action Plan to Promote the Development of CTCs in Hong Kong”.
“We have been in close communication with the industry. The tiered tax regime proposed in the consultation paper is precisely designed to address the pain points of the industry in a targeted manner, providing eligible corporations with more comprehensive tax benefits, greater tax certainty, and enhanced compliance flexibility,” Mr Hui said.
He added that the measures are expected to draw more multinational corporations across various sectors and regions to leverage Hong Kong’s role as a platform for “bringing in and going global”, encouraging them to bring funds and core businesses to the city for centralised management, and in turn strengthen Hong Kong’s position as a major base for CTCs.
Members of the public can submit their views on the consultation paper by post to 24/F, Central Government Offices, 2 Tim Mei Avenue, Tamar, Hong Kong, or by email by September 4.
After considering the feedback received, the Government plans to issue administrative clarifications for enhancing the existing tax concession regime for CTCs within this year, before introducing legislative amendments to the Legislative Council in the first half of next year.
