Government welcomes passage of Inland Revenue (Amendment) (Minimum Tax for Multinational Enterprise Groups) Bill 2024
The Government welcomed the passage of the Inland Revenue (Amendment) (Minimum Tax for Multinational Enterprise Groups) Bill 2024 by the Legislative Council today (May 28). It enables the implementation of the global minimum tax (GMT) and the Hong Kong minimum top-up tax (HKMTT) in Hong Kong from January 1, 2025, onwards in accordance with the Base Erosion and Profit Shifting (BEPS) 2.0 package promulgated by the Organisation for Economic Co-operation and Development (OECD) for tackling tax evasion risks arising from the digitalisation of the economy.
The Secretary for Financial Services and the Treasury, Mr Christopher Hui, said, "The implementation of the GMT and the HKMTT highlights Hong Kong's staunch support to international co-operation in tackling cross-border tax evasion, and safeguards Hong Kong's taxing rights. With the 15 per cent GMT for in-scope multinational enterprise (MNE) groups in place, countries and regions can no longer compete for capital and investment by simply lowering their corporate income tax rates. With a fairer global taxation environment, our unique advantages such as the 'one country, two systems', excellent connectivity, first-class infrastructure, mature financial markets, quality talent pools, East-meets-West vibes, etc will become even more accentuated to showcase Hong Kong as a premier destination for doing business."
Under BEPS 2.0, MNE groups with an annual consolidated revenue of 750 million euros or above in at least two of the four fiscal years immediately preceding the current fiscal year (in-scope MNE groups) will need to pay the GMT of at least 15 per cent on profits derived from every jurisdiction in which they operate. With the implementation of the HKMTT, the Government of the Hong Kong Special Administrative Region (HKSARG) will have the first priority in collecting top-up tax from entities of in-scope MNE groups with an effective tax rate (ETR) in Hong Kong below 15 per cent to raise it to 15 per cent. Otherwise, the relevant top-up tax may be collected by other BEPS 2.0-implementing jurisdictions in which the group also operates. Hong Kong's taxing rights would then be ceded to other jurisdictions. It is estimated that the new regimes will bring in an additional revenue of about $15 billion per year from 2027-28 to the HKSARG.
To facilitate compliance by in-scope MNE groups, taking account of stakeholders' views, the GMT and HKMTT regimes have incorporated various features, including:
safe harbours developed by the OECD, which are provided to reduce compliance burden;
the proposed record-keeping period is shortened, and the proposed time limit for filing a Global Anti-Base Erosion information return, if exchange mechanisms fail, is extended to reduce the compliance burden;
the "sole or dominant purpose test", instead of the "main purpose test"originally proposed, is adopted as the general anti-avoidance provision to maintain consistency with the existing mechanism;
the qualified domestic minimum top-up tax payable in other jurisdictions is allowable as a tax credit against profits tax charged under Part 4 of the Inland Revenue Ordinance (Cap. 112) (IRO) where appropriate; and
the top-up tax to be collected in Hong Kong will be deemed as profits tax so that the relevant existing tax administration mechanisms in the IRO can be applied.Where applicable, taxpayers can ride on Hong Kong's Comprehensive Avoidance of Double Taxation Agreements or Arrangements signed with other countries or regions for resolving cross-border disputes.
The Inland Revenue Department (IRD) has set up a dedicated team to provide technical support and answer enquiries with regard to BEPS 2.0. They will also publish online guidance addressing common concerns.
More details on the GMT and the HKMTT are available at the IRD's dedicated webpage (www.ird.gov.hk/eng/tax/bus_beps.htm).
Interdepartmental working group on festival arrangements releases latest information on special boundary-crossing and corresponding public transport service arrangements during New Year's Eve and New Year holidays
The interdepartmental working group on festival arrangements, led by the Chief Secretary for Administration, released the following information today (December 25) on the special boundary-crossing and corresponding public transport service arrangements during New Year's Eve and the New Year holidays.
In view of a series of New Year's Eve countdown events, while the Hong Kong Port of the Hong Kong-Zhuhai-Macao Bridge (HZMB) and the Lok Ma Chau/Huanggang Port (LMC/HG Port) will maintain 24-hour operations as usual, the Hong Kong Special Administrative Region (HKSAR) Government reached a consensus with the relevant departments of Guangdong Province and Shenzhen Municipality to make the following special boundary-crossing arrangements on New Year's Eve to facilitate cross-boundary passenger and vehicular movements:
(1) Passenger clearance services at the Lo Wu Control Point, which usually close at midnight, will be extended to 2am the next day. The operating hours of the MTR East Rail Line will be extended correspondingly, with the departure of the last East Rail Line train from Admiralty to Lo Wu extended to 12.56am; and
(2) Passenger and passenger vehicle clearance services at the Shenzhen Bay Port (SBP), which usually close at midnight, will operate overnight, providing round-the-clock services.
For more effective diversion of cross-boundary private cars on New Year's Day with the implementation of round-the-clock clearance at the SBP, only cross-boundary private cars issued with Closed Road Permits (Permits) for the LMC/HG Port are allowed to use the LMC/HG crossing. For cross-boundary private cars issued with Permits for SBP, LMC/HG, Heung Yuen Wai, Man Kam To Boundary Control Point (BCP) or Sha Tau Kok BCP, they can use the SBP during early-morning hours on New Year's Day.
For cross-boundary coaches, the HKSAR Government has also worked with cross-boundary coach service operators to arrange additional services using the SBP during early-morning hours on New Year's Day, and to enhance the services using the LMC/HG Port, including cross-boundary coaches departing from major stopping points in urban areas such as Wan Chai, Prince Edward and Jordan, as well as a shuttle bus running between the Lok Ma Chau (San Tin) Public Transport Interchange and the LMC/HG Port (Yellow Bus), and the HZMB shuttle bus (Gold Bus). Moreover, a dedicated traffic lane section will be reserved for public transport services at the HZMB, LMC/HG Port, and SBP when necessary, to ensure the smooth operation of public transport services.
As regards local public transport services connecting to BCPs, to tie in with the special round-the-clock passenger clearance arrangements of the SBP on New Year's Day, franchised bus operators will operate two special overnight bus routes, Nos. NB2 and NB3, to provide services to and from Yuen Long/Tin Shui Wai and Tuen Mun respectively during the overnight period. Furthermore, in the case of travellers using overnight services of the MTR East Rail Line that night, after the closure of the Lo Wu Control Point, they may also take the specially arranged short-working bus service, route No. N73, from MTR Sheung Shui Station to Lok Ma Chau (San Tin) Public Transport Interchange, and transfer to the Yellow bus for their journey to Shenzhen.
Residents and visitors may visit "Easy Boundary" (www.sb.gov.hk/eng/bwt/status.html?type=outbound), a one-stop information platform on immigration clearance launched by the Security Bureau, to obtain useful information in one go, including the respective average waiting time for passengers and private cars at land BCPs, as well as for the Gold Bus and Yellow Bus to plan their trips and save waiting time.
The Transport Department's Emergency Transport Co-ordination Centre will operate 24 hours to closely monitor the traffic conditions and public transport services of various districts, the BCPs and major stations; implement contingency measures when necessary to meet service demands; and disseminate the latest traffic information through various channels.
"The full support and co-ordination of the leaders and relevant departments of Guangdong Province and Shenzhen Municipality are crucial to the implementation of the special boundary-crossing arrangements to facilitate the two-way flow of people between Hong Kong and the Mainland, reflecting the effective and close co-operation between Hong Kong and Shenzhen," the spokesman said.
The HKSAR Government will closely monitor the situation and take contingency actions promptly where necessary and deploy manpower flexibly to ensure orderly operations of the BCPs. The Government has formulated contingency plans for the peak periods of cross-boundary travel and made preparations for preventive and control measures to cater for different scenarios. Relevant bureaux and departments have formulated the plans below.
First, with the extension of operating hours at certain BCPs on New Year's Eve, the relevant departments have minimised leave for frontline officers for flexible manpower deployment. Additional counters, temporary counters and channels will be in operation to facilitate passenger and vehicular flow.
Second, the Inter-departmental Joint Command Centre set up by the Hong Kong Police Force, the Immigration Department, the Customs and Excise Department and other relevant departments will be activated from December 31, 2025 to January 4, 2026 to monitor the real-time situations at various BCPs and regularly report to the interdepartmental working group on festival arrangements, maintain close liaison with Mainland port authorities through the established port hotlines and real-time notification mechanism, and take timely contingency actions to flexibly deploy manpower at the BCPs to ensure smooth operation of the land control points.
Third, the Security Bureau will activate the Emergency Monitoring and Support Centre from December 31, 2025 to January 4, 2026 to closely monitor public order matters and co-ordinate any necessary actions at various BCPs, and support the working group in facilitating interdepartmental follow-up actions where necessary to respond promptly to various kinds of emergencies.
The interdepartmental working group on festival arrangements is tasked with holistically co-ordinating and steering the preparatory work of various government departments for welcoming visitors to Hong Kong during the New Year's Eve and New Year holidays, as well as strengthening information dissemination to enable the public and visitors to plan their itineraries according to the latest situation.
Source: AI-found images
