Hong Kong Budget Highlights 2020/21

Author: Dutch Chamber of Commerce

Hong Kong’s financial secretary, the Honourable Paul MP Chan, delivered his 2020-2021 Budget speech to the Legislative Council on February 26th, with the Hong Kong government recording its first budget deficit for 15 years. The Hong Kong government’s strong fiscal reserves mean it has the capacity to provide immediate measures to tackle the situation and invest in the long term.

Mr Chan set out a range of measures to support the economy and restore confidence. The challenges from global and local uncertainties, and the recent coronavirus outbreak, provide the backdrop to a tougher outlook for Hong Kong. 

KPMGhas drafted a summary of the budget proposals, together with comments. The summary can be accessed through this link

Below is a snapshot of tax relief and other concessions: 

Cash Payout 
·        Cash Payout to Hong Kong permanent residents aged 18 or above of HK$10,000 

Examples of support for businesses and salary earners 
·        Concessionary low-interest loan with 100% Government guarantee for enterprises, up to a maximum of HK$2 million 
·        Reduce profits tax for 2019-20 assessment year by 100%, up to maximum of HK$20,000 
·        Reduce salaries tax for 2019-20 assessment year by 100%, up to maximum of HK$20,000 
·        Waive business registration fees for 2020-21 
·        Waive registration fees for company annual returns for 2 years

Link to the official Budget website.