PRESS RELEASE

(Source : Information Services Department)

Trade consultation on enhancing aircraft leasing preferential tax regime launched

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     The Transport and Logistics Bureau (TLB) today (November 22) launched a trade consultation on proposals to enhance the aircraft leasing preferential tax regime.

      The regime was introduced in 2017 to provide global industry players with competitive profits tax concessions in Hong Kong as compared to those of other places. Since then, a number of major industry players from the Mainland and overseas have set up their subsidiaries or operating arms in Hong Kong.

      In view of the rapid market changes over the past few years, and taking into account the international tax reform spearheaded by the Organisation for Economic Co-operation and Development (OECD) on base erosion and profit shifting (commonly known as BEPS 2.0), the Government plans to introduce a series of enhancement measures for the regime with a view to enhancing the competitiveness of Hong Kong. The proposals put forth by the Government are categorised as follows: 

 (1) Provision of tax deduction in respect of the acquisition cost of aircraft;

 (2) Expansion of the scope and coverage of lease and aircraft leasing activities;

 (3) Deduction of interest payable on money raised to finance the acquisition of aircraft;

 (4) Introduction of a threshold requirement to comply with OECD requirements; and

 (5) Specification of the leasing model involving the use of a bare trust.

      Details are set out in the consultation document (www.tlb.gov.hk/eng/publications/transport/consultation/air02/index.html). The Government will invite aircraft lessors; aircraft leasing management companies; professionals from such trade-related sectors as accounting, finance and legal; and the relevant trade association through written means or meetings to offer views on the proposed measures. All stakeholders are welcome to provide written submissions to the TLB not later than December 19 by email (aircraftleasing2022@tlb.gov.hk), fax (2524 9397) or by post (21/F, East Wing, Central Government Offices, 2 Tim Mei Avenue, Tamar, Hong Kong).

Ends/Tuesday, November 22, 2022
Issued at HKT 15:15

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