In this article we discuss the key points in Hong Kong’s new Inland Revenue (Amendment) (Ship Leasing Tax Concessions) Bill 2020 (the “Bill”), which was gazetted on 17 January 2020.
Ship leasing has become a significant and popular alternative source of financing for shipowners globally as liquidity concerns and cyclical downturns have caused many banks to reduce their shipping portfolios and loan tenures. To maintain Hong Kong’s reputation as a major maritime and financial centre, as well as its competitive edge against rival Asian cities, the Hong Kong government has focussed on attracting ship leasing business to the territory by introducing tax concessions via the Bill.
If the Bill is passed by the Legislative Council of Hong Kong, the new measures could apply as early as April this year for the tax year 2020/2021.
This article is not intended to serve as a comprehensive guide or detailed advice on the subject – and should not replace the need for specific legal and tax advice for individual needs and arrangements.