Stamp duty

• with effect from October 25, 2023:
• shorten the applicable period of the Special Stamp Duty (SSD) from three years to two years. In other words, if a property owner disposes of his/her property two years after acquisition, he/she will no longer need to pay the SSD, which amounts to 10% of the property price; 
• reduce the respective rates of the Buyer's Stamp Duty (BSD) and the New Residential Stamp Duty (NRSD) by half, from 15% to5 %; and
• introduce a stamp duty suspension arrangement for incoming talents acquisition of residential properties, which is an enhancement of the stamp duty refund arrangement introduced last year for incoming talents. Under the suspension mechanism, an eligible incoming talent who purchases a residential property in Hong Kong on or after October 25, 2023, may apply for suspension of stamp duty payment in respect of the BSD and the NRSD. Upon becoming a Hong Kong permanent resident, they can apply for waiver in relation to the stamp duty suspended.  
• reducing the rate of Stamp Duty on Stock Transfers to 1%, subject to passage of the “Stamp Duty (Amendment) (Stock Transfers) Bill 2023” (the Bill) by the Legislative Council (LegCo) and promulgation of the Ordinance in the Gazette. It is expected that the revised stamp duty rate could be implemented on 17 November 2023 at the earliest.

Profits tax 

• implement the "patent box" tax incentive to reduce the tax rate for qualifying profits derived from patents from the existing 16.5% to 5%, with a view to encouraging more R&D activities, as well as transformation and commercialisation of patented inventions (legislative proposals to be introduced in the first half of 2024).

Salaries tax

Starting from the year of assessment 2024/25:

• raising the deduction ceiling for home loan interest or domestic rents from the current HK$100,000 to HK$120,000 for taxpayers who reside with his/her first child born on or after 25 October 2023, until the child reaches the age of 18.
• providing deduction for expenses on assisted reproductive services, subject to the ceiling of HK$100,000 per year.

New Capital Investment Entrant Scheme 

• launching the Capital Investment Entrant Scheme to allow eligible investors who make investments of HK$30 million or more in assets (excluding real estate) to apply for entry into Hong Kong (details to be announced by the end of 2023).

Supporting small and medium enterprises

• launching “E-commerce Easy” under the Dedicated Fund on Branding, Upgrading and Domestic Sales to provide funding support for enterprises to develop e-commerce, subject to a ceiling of $1 million per enterprise.

For more information, please contact Ms. Amie Cheung at amie.cheung@lccpa.com.hk