Page 368 - 2017 White Paper

7 White Paper on the Business Environment in China
on profits arising in Hong Kong. Hong Kong regulations
also allow companies to claim offshore status, allowing
them total tax exemption on profits sourced outside of
Hong Kong.
All expenditures incurred in the generation of
assessable profits, including most interest costs, rent
for office and factory premises, bad debts, and salaries million passengers and nine million tons of cargo per
and payments to approved pension schemes, are
deductible from gross income. Sums paid out on capital
expenditures are not tax deductible. Losses can be
carried forward without any limits.
VAT and Withholding Tax
Value-added tax (VAT) is non-existent in Hong Kong.
There is also no withholding tax in Hong Kong for profit to 39 percent. The city’s major rail projects include the
repatriated back to the overseas parent company.
Salary Tax
There are two ways of calculating salary tax in Hong
Kong for the individual taxpayers who have assessable
income from employment:
(1) Progressive rate
Taken on a sliding scale (2-17 percent) against the
taxpayer’s annual net chargeable income (i.e. less
allowable deduction and personal allowances); and
(2) Standard rate
15 percent based on the annual net income (i.e. less
allowable deductions only). The final payable income
tax is the lower of the two tax liabilities. The maximum maritime services including ship registration, legal and
average tax rate in Hong Kong is thus 15 percent for
the current tax year. Dividends received from any
corporation enjoy tax exemption.
Infrastructure
The city is currently undergoing an ambitious
transport infrastructure program, and has a recent
annual budget of HK$15.5 billion to be spent on major
road and railway projects.The entirety of this program
is expected to be completed in 2020. In addition, the
government has allocated HK$85 billion to infrastructure
construction in its 2016/2017 fiscal budget.
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Air
The Hong Kong International Airport at Chek Lap
Kok is the busiest airport in the world for international
cargo. In 2015, HKIA handled 68.5 million passengers
and 4.38 million tons of cargo. By 2040, efforts to expand
the airport will increase its capacity to handle up to 87
year. The airport’s marine cargo terminal is linked with 18
ports in the Pearl River Delta.
Rail
Recently, five new rail projects expanded Hong
Kong’s network by 35 percent to over 200 kilometers,
with an increase in public transit service from 31 percent
7.4 kilometer extension of the Kowloon-Canton Railway
(KCR) from SheungShui to Lok Ma Chau Spur Line and
the Guangzhou-Shenzhen-Hong Kong Express Rail Link
worth US$8.6 billion.
Ports and Waterways
The Hong Kong port handles about 3/4s of Hong
Kong’s total cargo throughput and is among the world’s
busiest container ports by cargo throughput. There
are nine container terminals in Kwai Chung-Tsing Yi
basin under the operation of five different operators,
namely, the Modern Terminals, Hong Kong International
Terminals Ltd, COSCO-HIT, DP World and Asia Container
Terminals Ltd. There are some 800 shipping-related
companies in Hong Kong that provide comprehensive
dispute resolution services, ship financing and marine
insurance, and ship-ownership and vessel management.