, Hong Kong
119 view s
Photo by Jimmy Chan via Pexels

Hong Kong enacts 'patent box' tax concession

This include offering a 5% tax rate on qualifying profits from patents.

The Inland Revenue (Amendment) (Tax Concessions for Intellectual Property Income) Ordinance 2024 was officially gazetted on 5 July.

Effective immediately, the amendment introduces a "patent box" tax incentive aimed at boosting tax concessions for qualifying profits derived from eligible intellectual property (IP). 

The initiative allows eligible taxpayers to apply for incentives beginning from the 2023/24 assessment year.

Under the ordinance, eligible IP encompasses patents, copyrighted software, and new plant variety rights, whether registered locally or internationally. Profits derived from these IPs in Hong Kong will benefit from a concessional tax rate of 5%, markedly lower than the standard profits tax rate of 16.5%.

However, to qualify for these benefits, the IP must be developed internally by the taxpayer. If R&D involves acquiring IPs or outsourcing activities, the portion of profits eligible for the lower tax rate may be adjusted accordingly.

Moreover, enterprises must locally register their IPs within two years of the "patent box" tax incentive's implementation to avail themselves of the concession.

The Commerce and Economic Development Bureau said that this regime aims to incentivise increased R&D efforts and facilitate IP trading, bolstering Hong Kong's stature as a regional IP hub.

Separately, the government announced plans to conduct consultations on enhancing protections under the Copyright Ordinance, addressing emerging challenges from advancements in artificial intelligence technology. 
 

Join Hong Kong Business community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Top News

HKUST welcomes nearly 100 new scholars to boost strategic development
New recruits include high-profile research leaders, unicorn and company founders, and scholars from universities and public bodies.
HR & Education
What does Trump's return mean for Hong Kong?
Nomura predicts lower GDP growth and slower Fed rate cuts.
Economy
HK ranks seventh globally in digital competitiveness
It ranked third and fifth in ‘technology’ and ‘knowledge’, respectively.
Diffusion index climbs to 42.3 in October
Thanks to easing financial conditions and initiative to boost the business environment.
Economy