Hong Kong SAR Tax Summaries Online - Corporate Deductions

Hong Kong Corporate Tax Deductions

The Hong Kong SAR government offers various corporate tax deductions to encourage business growth and investment. Some of the key deductions include:

Depreciation allowances: These allowances can be claimed for the wear and tear of plant and machinery, as well as commercial and industrial buildings.
Hong Kong SAR Depreciation allowances
Research and development (R&D) expenditure: Qualifying R&D expenditure can be deducted at an enhanced rate of 300% for the first HK$2 million and 200% for the remaining amount.
Charitable donations: Donations to approved charitable institutions can be deducted from taxable profits.
Other deductions: Other allowable deductions include business expenses, bad debts, and losses from previous years.
Hong Kong SAR Other deductions

Here's more information on Hong Kong SAR corporate tax deductions:

Concessionary Tax Rates:

Qualifying Corporate Treasury Centers: These centers can enjoy a preferential 8.25% profits tax rate (half the standard rate) under specific conditions.
Qualifying Aircraft Leasing Activities: Similar to treasury centers, qualifying aircraft leasing activities also benefit from a reduced 8.25% profits tax rate.
Qualifying Shipping-Related Activities: Effective from April 1, 2022, businesses involved in ship agency, management, or broking can qualify for either tax exemption or a reduced 8.25% rate, subject to specific criteria.
Investment Management Services: Carried interest received by qualifying recipients from managing certified investment funds in Hong Kong can be taxed at a concessionary 0% rate, under specific conditions.

Other Key Deductions:

Losses Carried Forward: Losses incurred in one year can generally be carried forward indefinitely to offset future profits.
Foreign Tax Credits: Credits may be available for taxes paid to foreign governments on income from sources outside Hong Kong.
Double Taxation Relief: Agreements with various countries help avoid double taxation on income earned abroad.

Important Considerations:

Tax Laws are Dynamic: Tax laws and regulations in Hong Kong can change. It's crucial to stay updated on the latest developments.

Where to Find More Information:

For more detailed information on corporate tax deductions in Hong Kong SAR, you can refer to the following resources:

Inland Revenue Department of Hong Kong: The official government source for tax information.
Bestar Tax Summaries: https://www.bestar-hk.com/post/tax-summaries
Bestar Hong Kong Tax Guide: https://www.bestar-asia.com/post/hong-kong-tax-guide

Hong Kong SAR Tax Summaries Online - Corporate Deductions

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