Column: Articles of Interest

The Financial Secretary delivered the 2024/25 Budget (the “Budget”) today (28 February 2024). The Taxation Institute of Hong Kong (the “Institute”) appreciates and agrees with the theme of the Budget - “Strengthen confidence, seize opportunities, and promote high-quality development”. The Institute also welcomes the Financial Secretary in adopting a fiscal consolidation strategy to gradually narrow the fiscal deficit and return to balance....

The Hong Kong economy experienced a moderate revival in the first three quarters of 2023, with a year-on-year real GDP growth of 2.8% for the first three quarters. Real GDP grew by 4.1% in the third quarter of 2023 over a year earlier. The HKSAR Government revised its real GDP growth forecast for 2023 from 4% to 5% (as announced in August 2023) to 3.2%1. The HKSAR Government indicated that a fiscal deficit amounting to over HK$100 billion is envisaged for this year....

The Financial Secretary delivered the 2023/24 Budget (the “Budget”) today (22 February 2023). The Taxation Institute of Hong Kong (the “Institute”) supports this Budget. In view of the fact that economic activities begin to revive from the epidemic and the various economic stabilisation measures implemented over the past year gradually yield results, the Institute agrees the Government to continue implementing oneoff smaller-scale measures to support enterprises and general public for recovering the economy of Hong Kong....

The Hong Kong economy deteriorated markedly in the first quarter of 2022, followed by some improvement in the second quarter but with a widened year-on-year contraction in the third quarter of 2022. Real GDP fell by 4.5% in the third quarter of 2022 over a year earlier. For the first three quarters of 2022 as a whole, the economy contracted by 3.3% over a year earlier. The HKSAR Government revised its real GDP growth forecast for 2022 from -0.5% to 0.5% (as announced in August 2022) to -3.2%1. The HKSAR Government originally forecasted a fiscal deficit of HK$56.3 billion for 2022-23 but has now indicated that a fiscal deficit amounting to over HK$100 billion is envisaged for this year....

Tax administrations have been facing pressure from the electorate and media to combat tax avoidance and profit shifting away from their jurisdictions. Responding to this, G20 countries through the Organisation for Economic Co-operation and Development (OECD), and the Base Erosion and Profit Shifting (BEPS) project, have delivered a framework of 15 action plans to equip jurisdictions with tools to minimise the effects of tax avoidance and profit shifting. However, exchanges of data under Action 13 plan pose numerous challenges for tax administrations to make effective use of this information....

The Hong Kong economy grew solidly in the first three quarters of 2018, with a 3.7% real GDP growth in the first three quarters of 2018 over a year earlier. Taking into account the various increasing downside risks in the external environment, the HKSAR Government forecasts that the real GDP for 2018 as a whole will grow at 3.2%, which is within the range forecast of 3% to 4% announced by it in August 2018. Looking ahead, the various external factors, such as the China-US trade dispute, the rise of global trade protectionism, the possible further interest rate hikes in the US and the future development on Brexit, will likely affect Hong Kong’s economy and give rise to heightened uncertainties. Given the above external market situation and to achieve a long-term sustainable economic growth in Hong Kong, the Institute fully agrees to the HKSAR Government’s policy objectives of driving economic diversification and taking up the roles as a “facilitator” and...

“Equity is A Roguish thing, for Law wee have a measure know what to trust too. Equity is according to ye conscience of him yt is Chancellor, and as yt is larger or narrower soe is equity. Tis all one as if they should make ye Standard for ye measure wee call A foot, to be ye Chancellors foot; what an uncertain measure would this be; One Chancellor ha’s a long foot another A short foot a third an indifferent foot; tis ye same thing in ye Chancellors Conscience.” “Nothing would inflict upon me greater pain, in quitting this place, than the recollection that I had done any thing to justify the reproach that the equity of this Court varies like the Chancellor’s foot.”...

Australia has a liking for big tax reform projects. This paper concerns Australia’s most recent tax review — the 2009 Henry Review, Australia’s Future Tax System (“AFTS”) — and the Tax Forum which succeeded it in October 2011.1 It also considers the next tax review, the next tax summit, forum, colloquium or whatever, and the ones that will come after them....

Malaysia has a self-assessment regime which relies on taxpayers to determine their own tax obligations and comply voluntarily. Hence, understanding the significant influences on their behaviour is important. We used a large-scale survey on individual taxpayers in Malaysia to explore four potential determinants of tax compliance: tax fairness, enforcement, risk personality, and demographic variables. We found that taxpayers’ perception of tax fairness was significantly related to tax compliance, while neither enforcement nor risk personality was significantly related to tax compliance. Of the demographic variables studied, only the type of taxpayer (i.e. self-employed or salary and wage earner) was found to be significantly related to tax compliance....

The terms “subject to tax”, “tax paid”, and “tax payable” are found in the domestic tax and treaty provisions of Singapore that grant relief from double taxation. This paper focuses on companies and makes three submissions. First, income would be “subject to tax” in a treaty scenario as long as it was included in computing the tax liability of the company concerned; actual tax assessed is not a requirement. Second, “tax paid” and “tax payable” differ in meaning, although practice in effect interprets either term more widely as “tax has been paid or will be paid”. Third, the term “liable to tax”, discussed in the context of treaty provisions based on OECD Article 4(1), must be read liberally to give effect to the terms of those treaties....