Tax Exemption Order To Be Gazetted

The Exemption from Salaries Tax & Profits Tax (Anti-epidemic Fund) Order will be gazetted and take effect on May 29.

The order seeks to implement tax exemption from the year of assessment 2019-20 to most of the financial assistance or relief under the Anti-epidemic Fund provided to businesses or individuals.

The Government established the Anti-epidemic Fund and two rounds of relief measures have been rolled out. Apart from certain measures that have no tax consequences in respect of the sums received under the fund, other measures entail tax liabilities under the Inland Revenue Ordinance.

To enable businesses and individuals to fully benefit from the assistance under the fund, the beneficiaries will be exempt from the payment of profits tax and salaries tax in respect of the assistance unless the sums are paid for general business activities and are not paid in a matching arrangement.

The Government will adopt the same principles to provide tax exemption when further relief measures are rolled out under the fund.

Employers and employees do not need to report the sums exempted in tax returns upon the order’s commencement.

Businesses or individuals that have already filed their tax returns can provide the Inland Revenue Department with a written notification to amend the relevant information. Employers should file a revised employer's return for relevant employees.

The order will be tabled at the Legislative Council for negative vetting on June 3.

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