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The Revenue Ordinance 2008 ("the Ordinance") was gazetted on 27 June 2008. The purpose of the Ordinance is to amend the Inland Revenue Ordinance and the Hotel Accommodation Tax Ordinance to give effect to the following proposals in the 2008/09 Budget delivered by Hong Kong's Financial Secretary on 27 February 2008:
Profits tax
- Reduce the profits tax rate by 1% to 16.5% and 15% for companies and unincorporated business respectively
- Provide immediate tax deduction for certain environmental protection machinery and accelerated tax deduction for certain environmental protection installation
- Increase the ceiling of tax deductible charitable donations from 25% to 35%
Salaries tax
- Reduce the standard tax rate by 1% to 15% (the standard tax rate also applies to property tax)
- Widen the marginal tax bands by $5,000 to $40,000
- Restore the basic allowance, married person's allowance and single parent allowance back to the 2002/2003 level of $108,000, $216,000 and $108,000 respectively
- Increase the ceiling of tax deductible charitable donations from 25% to 35% (equally applies to tax under personal assessment)
One-off measure
- Waiver of 75% of profits tax, property tax, salaries tax and tax under personal assessment for 2007/2008, subject to a ceiling of $25,000
Government duties and charges
- Waiver of hotel accommodation tax
The above measures became effective on 27 June 2008 except the waiver of hotel accommodation tax, which will become effective on 1 July 2008. The changes with respect to profits tax and salaries tax apply to any year of assessment commencing on or after 1 April 2008 except the tax deductions for environmental protection machinery or environmental protection installation, which apply to capital expenditure incurred on or after (or deemed to have been incurred on) 27 June 2008. |
