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
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A law to ratify the Azerbaijan-Morocco DTA was tabled before Morocco's Cabinet on June 14, 2018.
Qatar's Government on June 14, 2018, confirmed that it had completed its domestic ratification procedures in respect of a DTA signed with Argentina.
Ukraine's Cabinet on June 6, 2018, approved a law to ratify a DTA Protocol signed with the United Kingdom.
Luxembourg and Vietnam agreed to continue negotiations towards a DTA Protocol at a June 15 meeting.
Sweden's Parliament on June 7, 2018, approved an amendment to the country's DTA with Switzerland to clarify the scope of the term pension fund in the agreement.
Switzerland's lower house of Parliament on May 29, 2018, approved DTAs with Kosovo and Pakistan.
The Moroccan Government has approved for ratification a DTA with the Republic of the Congo, it announced on May 29, 2018.
Argentina has approved a protocol to its DTA with Brazil, the Argentinian Official Gazette reported on May 23, 2018.
Brazil's upper house of Parliament on May 30, 2018, approved a protocol updating the DTA with Norway.
Hong Kong and Finland on May 24, 2018, signed a DTA.
Legislation ratifying a new DTA between Russia and Japan was submitted to the Russian State Assembly (the Duma) for approval on May 22, 2018.
Vietnam and Macau signed a DTA on April 16, according to a statement released by the Vietnamese Ministry of Finance on May 11, 2018.
Talks are continuing on a DTA between Jordan and Switzerland, according to a statement released by Jordan's Foreign Ministry on May 14, 2018.
The Czech Senate approved a law to ratify the DTA with Ghana on May 17, 2018.
The Philippines-Thailand DTA entered into force on March 5, and the Philippines' DTA with Sri Lanka on March 14, the Filipino tax agency announced on May 17, 2018. They will be effective from January 1, 2019.
Jordan's Minister of Planning and International Cooperation met with Luxembourg's Finance Minister to discuss enhanced cooperation between the two countries in a number of areas and agreed to seek to conclude a DTA.
Uzbekistan and Lithuania are to engage in talks towards a DTA, Uzbekistan's state news agency reported May 9, 2018.
Two Georgian committees approved the text of a DTA with Saudi Arabia and forwarded it for ratification, according to a May 17 announcement on the Georgian parliament's website.
Hong Kong gazetted an order to ratify its DTA with Saudi Arabia on May 18, 2018.
Talks are continuing on a DTA between Turkey and Afghanistan, according to a statement released by Turkey's Ministry of the Interior on May 11, 2018.
A new DTA between Finland and Spain will enter into force in January 2019, according to a May 18, 2018, announcement from the Finnish tax authority.
Andorra and Cyprus have signed a DTA, Andorra's Government announced on May 18, 2018.
Singapore and Brazil signed a DTA on May 7, 2018.
A DTA between Morocco and the Congo was signed on April 30, 2018.