Hong Kong tax-cut reform for corporate treasury centres sparks inquiries, PwC says

Following the launch of a public consultation on proposed enhancements to the tax concession regime for corporate treasury centres, PricewaterhouseCoopers said that they are receiving one to two corporate inquiries regarding the matter each month.

The initial draft includes expanding the scope of tax deduction of interest expenses to cover a broader range of corporations,  aiming to strengthen the city's competitiveness as a global asset management hub.

PwC noted that the proposed reforms could bring Hong Kong's tax regime in line with that of Singapore. 

Earlier, the Monetary Authority of Singapore is reportedly considering lowering the standard corporate tax rate of 17 percent for investment firms, in an effort to prevent talent outflow driven by Hong Kong's upcoming more attractive tax regime, according to the Financial Times.

Separately, the Hong Kong government has clarified that the tax benefits for fund managers and family offices proposed in the proposed bill will exclude proprietary trading businesses.

The Financial Services and Treasury Bureau said that the proposed legislation will not cover "businesses that use their own funds to buy, sell, or hold assets to generate income” since they don't fit the relevant definition of a fund.

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