Financial Secretary Paul Chan Mo-Po announced the 2022/23 Budget on 23 February 2022, outlining the government’s latest tax and fiscal policy directions, support measures and resources allocation to revitalise the economy and relieve the community’s burden.
Find out the highlights of this year’s Budget for SMEs and individuals.
For SMEs
- The two-tiered profits tax rates for companies (8.25%/16.5%) and unincorporated businesses (7.5%/15%) remain unchanged.
- Waive 100% of profits tax for 2021/22, subject to a ceiling of HK$10,000.
- Waive the business registration fees for 2022/23.
- Waive 100% of salaries tax and tax under personal assessment for 2021/22, subject to a ceiling of HK$10,000.
- Waive rates for non-domestic properties for the four quarters of 2022/23, subject to a ceiling of HK$5,000 per quarter for the first two quarters and HK$2,000 per quarter for the remaining two quarters for each rateable non-domestic property.
- Launch export financing scheme to help small and medium-sized exporters.
- Extend the application of 100% guarantee low-interest loan for enterprises to the end of June 2023, increase the maximum loan amount to 27 months of employee wages and rents with the loan ceiling raised to HK$9 million, extend the maximum repayment period to 10 years and offer the option of making partial repayment of principal over a longer period of time.
- Continue to waive 75% of water and sewage charges payable by non-domestic households for eight months, subject to a monthly ceiling of $20,000 and $12,500 respectively
- Extend the waivers/concessions of the existing 34 groups of government fees and charges for 12 months
- Continue to grant the 75% rental/fee concession to eligible tenants of government premises/short-term tenancies and waivers for six months (100% concession for those closed at the Government’s request)
- To strengthen support for export financing and export credit insurance.
For Individuals
- No change in the standard tax rate of 15%.
- No change in the progressive tax rates and the marginal tax bands.
- No change in the amounts of various personal allowances.
- Propose a tax deduction for eligible domestic rental expenses from 2022/23 for taxpayers liable to salaries tax or tax charged under personal assessment who do not own any domestic property, subject to an annual ceiling of HK$100,000.
- Waive 100% of salaries tax and tax under personal assessment for 2021/22, subject to a ceiling of HK$10,000.
- Waive rates for domestic properties for the four quarters of 2022/23, subject to a ceiling of HK$1,500 per quarter for the first two quarters and HK$1,000 per quarter for the remaining two quarters for each rateable property.
FAQ
Is every company eligible for the tax waiver?
Yes, if the company has profits tax payable.
Am I eligible for the tax waiver if I am not a Hong Kong resident but paying individual tax for the director’s remuneration?
Yes, the tax waiver is available for every individual taxpayer regardless of your residency.
When will the tax waiver take effect?
All kinds of tax waivers will be effective in the financial year of 2022/23. I.e. 1 April 2021 to 31 March 2022.
Is my company eligible for the tax waiver if its operation is not in Hong Kong?
Yes, the company is eligible for the tax waiver only if the company has to pay profits tax in Hong Kong in the financial year 2021/22.
Can the tax reduction carry forward into next year?
No, the 100% tax reduction ceiling of HK$10,000 is only applicable to the profit tax payable of the financial year 2021/22 and cannot be carried forward.
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