Global minimum 15% corporate tax may undermine Hong Kong’s tax incentives to attract businesses, lawmaker Robert Lee warns
- The new tax, agreed in 2021 by almost 140 countries, only applies to big multinational firms and won’t affect most Hong Kong companies
- Government will ‘strive to maintain tax competitiveness by upholding Hong Kong’s... low tax regime,’ says treasury chief Hui Ching-yu
The new level of tax will only apply to big multinational enterprises. Most Hong Kong companies, particularly small and medium-sized enterprises, will not be affected, the government said in a statement.
The minimum rate of 15 per cent will only be 1.5 percentage points below Hong Kong’s corporate tax rate of 16.5 per cent.
Under the new regime, if the effective tax rate of a multinational corporation in Hong Kong is lower than 15 per cent, other relevant jurisdictions will have the right to collect top-up tax.
“This effectively puts a floor on competition over corporate income tax, which would mean Hong Kong can no longer offer tax incentives to attract businesses,” said lawmaker Robert Lee Wai-wang, who is also the CEO of brokerage Grand Capital Holdings.