The Amendment Ordinance amends the Inland Revenue Ordinance (Cap. 112) ("IRO") by incorporating the GloBE Model Rules promulgated by the OECD with necessary adaptations and introducing provisions on the HKMTT. This alert summarizes the key features of the Amendment Ordinance and the tax implications for in-scope MNE groups.
Key takeaways
The Amendment Ordinance introduces the GloBE and HKMTT rules into Hong Kong's corporate tax framework under the OECD's BEPS 2.0 initiative, bringing with them a host of new tax implications and compliance obligations for in-scope MNE groups having a presence in Hong Kong.
The IIR and HKMTT provisions apply to fiscal years beginning on or after 1 January 2025. MNE groups falling within the scope of the GloBE and HKMTT rules should assess their top-up tax exposure and compliance obligations (e.g., the first top-up tax notification and GIR will be due for filing in 2026 and 2027 respectively) and consider their eligibility to any safe harbor providing relief from performing full GloBE calculations.
As the Amendment Ordinance incorporates and gives effect to the administrative guidance issued by the OECD from time to time to supplement and clarify the interpretation and operation of the GloBE rules in Hong Kong, in-scope MNE groups should also keep an eye on how the latest OECD guidance may affect their tax positions and obligations under the GloBE and HKMTT rules.
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