Q4- Impacts on Hong Kong people by an amendment to the tax law on the Mainland
MR CHAN CHUN-YING (in Cantonese):
President, the new tax law allows people from Hong Kong, Macao and Taiwan to enjoy a five-year exemption, but this arrangement is only for individuals. The subsidiaries of Hong Kong enterprises in the Mainland, especially the financial institutions, have employed many foreign employees who are not from Hong Kong, Macao and Taiwan, and presently, it is not explicitly stated whether these employees can enjoy the same period of exemption. If the foreign employees of Hong Kong enterprises will not be benefited, when enterprises deploy foreign employees to the Mainland in the future, they may have to examine whether the countries of these employees have signed an agreement on avoidance of double taxation with China, so as to avoid perplexity.
Will the Government ask the Central Authorities to take Hong Kong enterprises as the mainstay and allow a certain proportion of employees who are not from Hong Kong, Macao and Taiwan to enjoy the same five-year exemptions?
SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Cantonese):
President, the Draft for Public Consultation proposes to maintain the existing Regulations. According to our understanding, the tax concession policy for individuals who have no domicile and have resided in the Mainland for less than five years does not only apply to people from Hong Kong, Macao and Taiwan. Therefore, the people whom the Member is concerned about should also enjoy the same period of exemption.