PRESS RELEASE

Inland Revenue (Amendment) (Tax Concessions for Certain Shipping-related Activities) Ordinance 2022 gazetted

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   The Government published in the Gazette today (July 22) the Inland Revenue (Amendment) (Tax Concessions for Certain Shipping-related Activities) Ordinance 2022 (the Ordinance) to provide half-rate profits tax concessions (i.e. at a tax rate of 8.25 per cent) to qualifying shipping commercial principals (i.e. ship agents, ship managers and ship brokers) so as to implement the 2021 Policy Address initiative on growing the maritime business. Tax concessions will apply to sums received by or accrued to shipping commercial principals on or after April 1, 2022.

      A spokesman for the Transport and Logistics Bureau said, "Ship agency, ship management and ship broking businesses are important maritime business services supporting international shipping activities. The newly introduced tax measures will provide economic incentives for qualifying ship agents, ship managers and ship brokers to operate in Hong Kong. As these businesses serve to facilitate ship ownership and operation, which also generate demand for other maritime business services, fostering the development of shipping commercial principals in Hong Kong is conducive to the growth of our shipping business and maritime cluster."
  
      In addition, under the Ordinance, the profits derived by a qualifying shipping commercial principal from carrying out a qualifying activity for an associated shipping enterprise, which is entitled to a concessionary tax rate or income exemption under the Inland Revenue Ordinance, will be subject to the same concessionary tax rate or income exemption as those applicable to the associated shipping enterprise. The Ordinance has built in anti-abuse provisions to safeguard the integrity of the tax system and comply with the latest international tax rules.
  
      The "Outline of the 14th Five-Year Plan for National Economic and Social Development of the People's Republic of China and the Long-Range Objectives Through the Year 2035" and the "Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area" support consolidating Hong Kong's position as an international maritime centre and the development of high value-added maritime services in Hong Kong for better integration into the country's development course.  To develop Hong Kong into a ship leasing centre in the Asia-Pacific region, the Inland Revenue (Amendment) (Ship Leasing Tax Concessions) Bill 2020 was passed by the Legislative Council in June 2020. It provides for tax exemption and half rate tax concession on qualifying income by qualifying ship lessors and ship leasing managers respectively. Recognising the business opportunities arising from the growth of shipping commercial principals and the competitive landscape for maritime business in the region, the Government announced its plan to introduce tax concessions for shipping commercial principals in 2021. The Ordinance will strengthen Hong Kong's competitiveness in attracting ship agency, ship management and ship broking activities, which will also help attract the setting up of high-valued maritime business establishments in Hong Kong, thereby consolidating the city's position as an international maritime centre.

Ends/Friday, July 22, 2022 
Issued at HKT 11:16

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