On Oct. 16, HK Tax said bill to enhance profits tax will be gazetted.
HK Tax said HK PRL will gazette the Inland revenue (amendment) (tax deductions for leased premises reinstatement and allowances for buildings and structures) bill 2024.
Bill introduces a tax deduction for expenses incurred for reinstating the condition of premises under a lease to their original condition, and removes the time limit for claiming annual allowances in respect of industrial/commercial buildings or structures.
If a lessee is obligated to reinstate or pay for the reinstatement of premises to original condition, and relevant costs incurred are reasonable, they can claim tax deduction.
Currently, a qualifying taxpayer may claim annual allowance for expenditure incurred on construction of an industrial/commercial building during a specified usage period.
If the building or structure is sold before expiry of the usage period, buyer may claim annual allowances over the remaining years of assessment within the usage period.
However, if the building or structure is sold after expiry of the usage period, they will not be entitled to claim any annual allowance even if there is residue of expenditure.
As such, the bill proposes to remove the time limit for the relevant claims, in order not to discourage the purchase of old or second-hand buildings or structures.
Oct. 18, 2024 HK GVT Bill
On Oct. 18, 2024, HK GVT published the bill, HK PRL issued Legislative Council brief.
Bill will be introduced into the Legislative Council for first reading on Oct. 30, 2024, with a view to implementing the above measures in the year of assessment 2024/25.
Dec. 2024 Bill Passed
On Dec. 18, 2024, HK Tax welcomed passage of bill, regarding two tax enhancement measures announced in 2024-25 budget, effective from the 2024/25 assessment year.
The amendment ordinance will be published in the Gazette on Dec. 27, 2024.
HK Tax said detailed information, including FAQs, is available on the HK Tax website.
