Hong Kong’s Financial Secretary, John C Tsang, made the traditional post-budget speech at the Joint Business Community Luncheon on March 12 and, in particular, reviewed the tax measures taken to increase the transaction cost of property speculation so as to reduce the risk of a property bubble being created.
In the budget, the government proposed that from April 1, stamp duty on properties valued at over HKD20m (USD2.6m) will be raised from 3.75% to 4.25%, and buyers will no longer be allowed to defer payment of stamp duty on such transactions. The government will also closely monitor the trading of properties valued at or below HKD20m. If there is excessive speculation in the trading of these properties, the government will consider extending the measures to these transactions.
He reminded his audience and taxpayers that “the Inland Revenue Department has established procedures to track property transactions involving speculation. If these transactions were found to constitute a business, we will levy profits tax, the current rate is 16.5%, on those concerned for profits arising from such transactions.”
While the government will also work to ensure transparency in property transactions and strengthen market regulations, the government will also “prevent the excessive expansion of mortgage lending and ensure banks process mortgage loan applications prudently. We will introduce further measures when it is necessary to strengthen further the prudent regulation of our banks.”
He emphasized that the “basket of measures is not introduced to be a quick-fix, and it does not come with a promise of overnight results.” The measures should, he added, “send a clear and strong message to the market, and to the public of our intentions to curb property speculation and dampen price fluctuations.”
He confirmed that the government would continue to monitor market developments closely, and that, in his opinion, the budget contained appropriate measures to promote long-term stability of the property market. However, he concluded that, “if need be, we will implement additional measures to cool speculation.”A comprehensive report in our Intelligence Report series dealing with the issues raised by international property investment, and the possible taxation implications raised by such purchases, with an account of the likely (and some less obvious) potential countries for your consideration, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report15.asp
Treaty Update: India - New Zealand
India ratified a third Protocol to its DTA with New Zealand on November 2, 2017, publishing a Notice in its Official Gazette.
Treaty Update: Gibraltar - United Kingdom
Gibraltar and the United Kingdom are considering launching negotiations towards a DTA, according to recent comments from the UK's Economic Secretary to the Treasury.
Treaty Update: Barbados - Italy
Barbados and Italy have exchanged instruments of ratification in respect of a DTA, which will now become effective from January 1, 2018.
Treaty Update: Switzerland - Pakistan
Switzerland's Government on October 25, 2017, adopted a dispatch on the DTA concluded with Pakistan, enabling its ratification.
Treaty Update: Spain - Portugal
Spain and Portugal signed a DTA on October 18, 2017.
Treaty Update: Pakistan - Latvia
Pakistan and Latvia initialed a DTA on October 25, 2017.
Treaty Update: Spain - Romania
Spain and Romania signed a DTA on October 18, 2017.
Treaty Update: Denmark - Japan
Denmark and Japan signed a DTA Protocol on October 11, 2017.
Treaty Update: Bahamas - Finland
The Bahamas and Finland signed a Protocol to amend their TIEA on October 19, 2017.
Treaty Update: Netherlands - Zambia
The Dutch lower house of parliament on October 24, 2017, approved the ratification of a DTA signed with Zambia.
Treaty Update: Cyprus - Mauritius
Cyprus and Mauritius signed a DTA Protocol on October 23, 2017.
Treaty Update: Armenia - Iran
According to preliminary media reports, Armenia and Iran are to enter into negotiations to revise their DTA.
Treaty Update: United Kingdom - Ukraine
The United Kingdom and Ukraine signed a DTA Protocol on October 9, 2017.
Treaty Update: Spain - Finland
According to preliminary media reports, Spain's Cabinet on October 6, 2017, approved the signing of a DTA and accompanying Protocol with Finland.
Treaty Update: Russia - Japan
Russia and Japan signed a DTA on September 7, 2017.
Treaty Update: Isle of Man - Turkey
A new TIEA between the Isle of Man and Turkey entered into force on October 7, 2017.
Treaty Update: United Kingdom - Belarus
The United Kingdom and Belarus signed a DTA on September 26, 2017.
Treaty Update: Morocco - Togo
According to preliminary reports, Morocco intends to launch DTA negotiations with Togo.
Treaty Update: Morocco - Bahrain
Morocco on September 21, 2017, published a notice in its Official Gazette to ratify and bring into effect the DTA Protocol signed with Bahrain in April 2016.
Treaty Update: Luxembourg - Sri Lanka
At a meeting on September 27, 2017, Luxembourg and Sri Lanka committed to expediting the negotiation of a Protocol to their double tax agreement.
Treaty Update: Burkina Faso - Turkey
Burkina Faso and Turkey initialed a DTA at the conclusion of three-day negotiations on September 22, 2017.
Treaty Update: Kuwait - Turkey
Kuwait and Turkey signed a DTA Protocol on September 15, 2017.
Treaty Update: South Africa - Cameroon
An order to bring into force South Africa's DTA with Cameroon was published in the nation's Official Gazette on September 1, 2017.
Treaty Update: Paraguay - Uruguay
Paraguay and Uruguay signed a DTA on September 8, 2017.
Treaty Update: Spain - Paraguay
According to preliminary media reports, Spain and Paraguay are to relaunch DTA negotiations.