With the passage of the Inland Revenue (Amendment) (No. 5) Bill 2018 by the Legislative Council on 14 November 2018, the three concessionary tax measures proposed in the 2018-19 Budget were became effective as followings:
- Electing for personal assessment (PA) of married persons
Currently: Election for personal assessment must be made by husband and wife jointly. Separate taxation for the couple is not applicable under PA
With effect from year of assessment 2018/19: husband and wife are with the option of electing for PA separately. - Expenditure on Environmental Protection Facilities
Currently: A deduction at 20% of the expenditure is allowed in each of the 5 consecutive years commencing from the year in which the expenditure is incurred.
With effect from year of assessment 2018/19: Full deduction is allowed during the basis period in which the capital expenditure incurred for procuring environmental protection installations is incurred. - Tax exemption for debt instruments under the Qualifying Debt Instrument (QDI) Scheme
Currently: interest income and trading profits derived from a debt instrument issued in Hong Kong with an original maturity of less than 7 years but not less than 3 years are subject to a concessionary tax rate equivalent to 50% of the normal profits tax rate.
With effect from year of assessment 2018/19: The scope of tax exemption for debt instruments under the QDI Scheme would be extended.
Please refer to https://www.ird.gov.hk/eng/tax/bus_qdi.htm for the updated list of Qualifying Debt Instruments.
The above information was extracted from the press release of Hong Kong Inland Revenue Department. For more information, please visit the website:
https://www.ird.gov.hk/eng/ppr/archives/18111405.htm
https://www.info.gov.hk/gia/general/201806/13/P2018061300637.htm
