Implementation of Two-Tiered Profits Tax Rate Regime
The Inland Revenue (Amendment) (No. 3) Ordinance 2018 (the Ordinance) was gazetted today (March 29) to implement the two-tiered profits tax rates regime announced in the 2017 Policy Address.
The two-tiered profits tax rates regime will be applicable to any year of assessment commencing on or after April 1, 2018. The profits tax rate for the first $2 million of profits of corporations will be lowered to 8.25 per cent. Profits above that amount will continue to be subject to the tax rate of 16.5 per cent. For unincorporated businesses (i.e. partnerships and sole proprietorships), the two-tiered tax rates will correspondingly be set at 7.5 per cent and 15 per cent. A tax-paying corporation or unincorporated business may save up to $165,000 and $150,000 each year respectively.
For details, please refer to the official website of the Hong Kong Inland Revenue Department.