Government should amend tax measures to boost international financial hub status

It’s high time to boost the private equity fund and asset management industry.

Accounting and professional services firm Deloitte urged the Hong Kong government in its pre-budget proposal to amend and roll out certain tax measures that will boost the city’s status as an international financial centre in the global economic arena.

This entails expanding profits tax exemption to onshore private equity funds and implementing preferential tax rates for fund managers operating in Hong Kong like halving the tax rate similar to a treasury center business.

The introduction of a tax incentive will also do well to boost the asset management industry in Hong Kong.

“To strengthen Hong Kong's status as an international financial center, we recommend that the Government needs to improve the existing tax system and provide tax incentives to promote local financial services activities, and attract local investment funds industry,” Deloitte noted.

The firm also called on the government to fast-track the update Departmental Interpretation and Practice Notes (DIPN) following the enactment of Inland Revenue Amendment Bill No.6 or the transfer pricing bill.