Inland Revenue (Amendment) (Tax Deductions for Leased Premises Reinstatement and Allowances for Buildings and Structures) Bill 2024 to be gazetted
The Inland Revenue (Amendment) (Tax Deductions for Leased Premises Reinstatement and Allowances for Buildings and Structures) Bill 2024 will be gazetted on October 18. The Bill seeks to implement two profits tax enhancement measures in the 2024-25 Budget, which include introducing a tax deduction for expenses incurred for reinstating the condition of premises under a lease to their original condition, and removing the time limit for claiming annual allowances in respect of industrial/commercial buildings or structures.
Under the Bill, if a lessee is obligated to reinstate or pay for the reinstatement of his/her premises to their original condition at the end of the lease term or on early termination of the lease, and the relevant costs have been incurred and are reasonable, the lessee can claim tax deduction for the relevant costs.
Furthermore, currently a qualifying taxpayer may claim an annual allowance in respect of the expenditure incurred on the construction of an industrial/commercial building or structure during a specified period (usage period). If the building or structure is sold before the expiry of the usage period, the buyer may claim annual allowances over the remaining years of assessment within the usage period. However, if the building or structure is sold after the expiry of the usage period, the buyer will not be entitled to claim any annual allowance even if there is residue of expenditure. The Bill proposes removing the time limit for the relevant claims in order not to discourage the purchase of old or second-hand buildings or structures. If a building or structure is sold in the basis period for a year of assessment beginning on or after April 1 this year, the buyer will be entitled to claim annual allowances until the residue of expenditure has been fully claimed, regardless of whether the usage period of the building or structure concerned has expired.
A Government spokesman said, "The two enhancement measures will alleviate the tax burden of taxpayers and promote the business environment. As reinstatement costs generally represent a small part of a taxpayer's turnover, it is envisaged that the proposed tax deduction would not impact on government revenue. Regarding the removal of the time limit for claiming annual allowances for buildings or structures, based on the statistics for the year of assessment 2022/23, it is expected that it will reduce the annual government revenue by about $164 million."
The Bill will be introduced into the Legislative Council for first reading on October 30 with a view to implementing the above measures in the year of assessment 2024/25.
Education Commission Chairman welcomes "The Chief Executive's 2024 Policy Address"
The following is issued on behalf of the Education Commission:
The Chairman of the Education Commission, Dr David Wong, welcomed the education initiatives announced in "The Chief Executive’s 2024 Policy Address" delivered today (October 16).
Dr Wong said, "As the Chairman of the Education Commission, I support the Government's commitment to enhancing the quality of education. To complement the country's development strategy, the Government strives to develop Hong Kong into an international hub for post-secondary education on all fronts, nurture and attract diversified talent to achieve the goal of building an international hub for high-calibre professionals.
"I support the Education Bureau's ongoing efforts in leveraging Hong Kong's edge of a highly international and diversified post-secondary education sector. Through encouraging local institutions to enhance exchanges and collaboration with institutions from around the world, hosting more international education conferences and exhibitions to promote the 'Study in Hong Kong' brand on a global scale, and setting up the Hong Kong Future Talents Scholarship Scheme for Advanced Studies, our goal is to establish Hong Kong as an international hub for post-secondary education and enhance Hong Kong's competitiveness."
He added, "I am pleased that the Government, to complement the national strategy of invigorating the country through science and education, will promote digital education, review the curriculum of junior secondary Science, and support teachers in utilising artificial intelligence for teaching. These efforts will continue to foster STEAM (Science, Technology, Engineering, the Arts and Mathematics) education in primary and secondary schools, thereby enhancing Hong Kong's edge in innovation and technology. Furthermore, the Government is committed to enhancing the language proficiency of our students and strengthening support to achieve a good mastery of English language, Putonghua and other languages to heighten their global competitiveness and broaden their horizons. Additionally, the Government will remain dedicated to promoting national security and patriotic education on all fronts by incorporating elements of Chinese history and national geography into Mainland study tours to foster students' sense of national identity. To build a high-quality teaching force, the Government will set up the Teacher Professional Development Fund of $2 billion to provide a steady funding source for teacher training and exchange programmes."
Dr Wong also appreciated the Government's efforts in enhancing students' whole-person development and the well-being of teachers and students. This includes further promotion of the 4Rs Mental Health Charter, launch of the "Mental Health Literacy" resource packages, strengthening of teacher training and parent education, and extending and enhancing the Three-Tier School-based Emergency Mechanism, promoting the physical and psychological wellness of students, teachers and parents, and enhancing resilience and cultivating positive thinking among them.
"Education is the cornerstone of social advancement. The Education Commission will continue to render advice and work together with the Government to foster the long-term development of Hong Kong's education, with a view to cultivating values and nurturing people with quality education. We aim to enable young people to unleash their potential and gain a global perspective, and become visionary, innovative and creative successors with an affection for the motherland and a sense of responsibility towards society, who shall contribute to the new quality productive forces and high-quality development of our country, shaping a better future," Dr Wong said.
