May 2015, Issue 5
Hong Kong as the ‘Going Global’ platform for Chinese MNCs
Proposals announced by the HKSAR Government in its 2015/16 Budget look to provide a more commercial friendly environment for operating a corporate treasury centre (CTC) or an intellectual property (IP) hub in HK. The proposals seek to attract multinational enterprises (MNEs), including Chinese MNEs, to manage their regional treasury activities or to hold their IPs in HK by removing ineffective HK tax treatments in these areas.
In particular, the proposals on CTC aim to remove the mismatch in the HK tax treatments for interest expenses and interest income which are the major concerns for CTCs. For IP hub, the scope of tax deduction for capital expenditure incurred on the purchase of IP rights would be extended to cover more types of IP rights as appropriate. Coupled with the expanding HK tax treaty network, these proposals aim to enhance the tax effectiveness of using a HK company as a regional CTC or IP holding company. The proposals would be welcome by Chinese MNEs which are taking advantage of the state strategy of ‘Going Global’ adopted by the Chinese Government. Other issues of Hong Kong Tax News Flash
Visit our Tax Library