July 25 2022

Hong Kong Enacts Tax Concessions for Shipping Industry

Source: IBFD Tax Research Platform News

The government has gazetted the Inland Revenue (Amendment) (Tax Concessions for Certain Shipping-related Activities) Ordinance 2022, providing half-rate profit tax concessions (i.e. at a rate of 8.25%) to qualifying shipping commercial principals (i.e. ship agents, ship managers and ship brokers). The Ordinance gives effect to the proposal contained in the Chief Executive's 2021 Policy Address, to introduce tax concessions in order to grow the maritime industry in Hong Kong.

Furthermore, under the Ordinance, the profits derived by a qualifying shipping commercial principal from carrying out a qualifying activity for an associated shipping enterprise that is entitled to a concessionary tax rate or income exemption will be subject to the same concessionary tax rate or income exemption as that applicable to the associated shipping enterprise. The Ordinance has incorporated anti-abuse provisions to safeguard the integrity of the tax system and comply with the latest international tax rules.

The tax concessions apply to sums received by or accrued to shipping commercial principals on or after 1 April 2022.