HK losing Asia headquarter hub position (2)

The accounting body said that Hong Kong government should grant a 10-year tax holiday to companies establishing regional headquarters in Hong Kong. With the first three years after the introduction of the exemption, there should be 100 percent tax exemption. This should be followed by a reduced profits tax rate of 10 percent for the remaining seven years. After the 10-year tax holiday, multinationals should pay the standard corporate tax rate of 16.5 percent.

Regarding multinationals which had currently established their headquarters in Hong Kong, CPA Australia suggested that these companies should receive the benefit of a 10 percent concessionary tax rate for seven years.

The accounting body also urged the Hong Kong government to launch its first comprehensive tax review since 1976 to identify sustainable revenue sources to combat the narrow tax base against the aging population and rising costs of social welfare needs; as well as to improve the city's competitiveness in Asia.

CPA Australia recommended the launch of a luxury goods tax of 3 percent on luxurious items such as boats and yachts, watches and jewellery. The tax should be made non-refundable to tourists. CPA Australia estimated that the tax levy can bring HK$3 billion ($387.07 million) tax receipts to the government's coffer and the new tax should not have a detrimental impact on the local economy.

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