Tax Exemptions in respect of Relief Measures under the Anti-epidemic Fund

The Exemption from Salaries Tax and Profits Tax (Anti-epidemic Fund) Order ("the Exemption Order") comes into operation on 29 May 2020. The Exemption Order exempts, subject to certain conditions, individuals and businesses from the payment of salaries tax and profits tax in respect of financial assistance or relief provided under the Anti-epidemic Fund ("AEF"). The exemption applies in relation to salaries tax and profits tax chargeable for the year of assessment commencing on 1 April 2019 and for all subsequent years of assessment.

Salaries Tax
- Tax exemption
- Arrangement for filing tax returns by Employers or Individuals (employees)
Profits tax—tax exemption
Q & A for tax exemptions in respect of relief measures under the Anti-epidemic Fund
Related links

Salaries tax

Tax exemption

The Exemption Order exempts individuals (as employees) from the payment of salaries tax in respect of the following payments under AEF programmes:

First & Second round of Anti-epidemic Fund

A monthly hardship allowance of $1,000 to each of the cleansing / security workers of private residential / composite / industrial / commercial buildings, to strength their capacity on personal and environmental hygiene, and recognize their Anti-epidemic efforts
A monthly allowance of $1,000 to each cleansing worker, toilet attendant and security worker engaged under Government and Hong Kong Housing Authority service contracts, to provide financial support to them in Anti-epidemic efforts, and give recognition to them for their committed services provided at this critical juncture
A subsidy of $1,500 or $1,000 to each registered construction worker
A subsidy of $7,500 to each registered construction worker and registered inspector under the Buildings Ordinance, and licensed plumber under the Fire Service (Installation Contractors) Regulations
One-off relief grant of $10,000 for each employed school bus driver, school private light bus driver and $10,000 per vehicle for employed escorts / nannies
A one-off subsidy of $10,000 to each employed driver of tour service coach
A subsidy of $350 to employed cross-boundary goods vehicle drivers to conduct COVID-19 nucleic acid test in Hong Kong
One-off relief grant of $7,500 for each employed instructor, coach, trainer or operator of interests classes engaged by schools
One-off grant of $7,500 to each employed registered coach under National Sports Associations and Sports Organizations who has proven coaching record in the past one year
A monthly subsidy of $5,000 to each travel agents’ staff and active freelance tourist guides and tour escorts who are employees
One-off cash subsidy to each employed individual with salesperson licence ($2,510) and employed individual with estate agent licence ($3,930)
A cash subsidy of $2,000 to each employed Securities and Futures Commission licensed individuals

Third round of Anti-epidemic Fund

(a) One-off subsidy of $15,000 to each travel agent’s staff
(b) One-off subsidy of $6,700 to each employed tour service coach driver mainly serving tourists
(a) One-off relief grant of $6,700 to each employed school bus driver and school private light bus driver and $6,700 per vehicle for employed escorts (“nannies”). For cross-boundary school bus, a higher subsidy of $13,400 per vehicle for escorts and the maximum amount of subsidy for each escort is $6,700
(b) One-off relief grant of $5,000 to each employed instructor, coach and trainer engaged by a primary or secondary school
One-off grant of $5,000 to each eligible registered sports coach under National Sports Associations and Sports Organisations with proven record of active coaching during the past one year

Grants, subsidies or other financial assistance provided from further injection into the Anti-epidemic Fund

(a) One-off relief grant of $10,000 to each employed school bus driver and school private light bus driver and $10,000 per vehicle for employed escorts (“nannies”).
(b) One-off relief grant of $7,500 to each employed instructor, coach and trainer engaged by schools.
One-off grant of $7,500 to each eligible registered sports coach under National Sports Associations and recognized Sports Organisations with proven record of active coaching during the past one year.
Ex-gratia payments to each part-time instructor, staff or personnel affected by cancellation of sports & recreation and culture programmes due to the closure of venues/facilities of the Leisure and Cultural Services Department. The amount of ex-gratia payment is equivalent to their full remuneration for the cancelled programmes.

Arrangement for filing tax returns by Employers or Individuals (employees)

Individuals covered by the measures listed above are not required to report the payments under AEF programmes in their Tax Returns – Individuals for the years of assessment 2019/20 and onwards.

Employers of these individuals are also not required to report the payments under AEF programmes listed above in their employers' returns for the years of assessment 2019/20 and onwards.

Employers who have already filed their employers' returns for the year of assessment 2020/21 and have reported the payments under AEF programmes listed above in their employers' returns, are required to furnish replacement IR56 forms.

For details relating to the amendments to Form IR56s, please visit https://www.ird.gov.hk/eng/tax/ere_amd.htm

Profits tax—tax exemption

The Exemption Order exempts businesses from the payment of profits tax in respect of grants, subsidies or other financial assistance provided under AEF programmes. The exemption, however, does not apply to sums (other than sums paid on a matching arrangement) that are ordinary trading receipts arising in or derived from Hong Kong from a trade, profession or business carried on in Hong Kong, which include but are not limited to –

Proceeds of sale of goods:
- Sale proceeds of masks received from the Government under the Local Mask Production Subsidy Scheme
- Income received by technology companies for providing technology applications such as reusable masks
- Reimbursements received by oil companies in respect of price discounts on liquefied petroleum gas sold to taxis and public light buses
Consideration for provision of services:
- Fees received by the service provider, mediators and arbitrators for the provision of online dispute resolution services under the COVID-19 Online Dispute Resolution Scheme
- Administrative fees received by oil companies, MPF trustees, service contractors of the Government and the Hong Kong Housing Authority, and sports organisations for implementing the relevant AEF programmes
Incomes from the letting, sub-letting or licensing of any premises or portion thereof:
- Reimbursements received by landlords for offering "rental waivers" to their tenants

Related links