In adherence to global tax standards, the Hong Kong government has introduced a new amendment, focused on minimum taxation for international business groups. Aligning with jurisdictions such as Spain and Singapore, Hong Kong will implement a 15% Global Tax on multinationals with annual revenues exceeding €750 million (approximately $785.40 million USD).
Understanding the Global Tax
This measure is part of the OECD’s BEPS 2.0 (Base Erosion and Profit Shifting 2.0) initiative, designed to prevent profit shifting to low-tax jurisdictions and promote global tax equity.
Hong Kong Minimum Top-up Tax (HKMTT)
To ensure compliance with the 15% minimum threshold, the HKMTT will be implemented. This complementary tax will require companies with an effective tax rate below 15% to remit the difference. For example, a company with a 10% effective tax rate will pay an additional 5%. This ensures adherence to international regulations while preserving Hong Kong’s position as a global financial center.
Strategic Implications and Compliance
The implementation, scheduled for 2025 and pending final approval, reinforces Hong Kong’s commitment to tax transparency in an increasingly regulated global environment. This regulation necessitates a thorough review of multinational tax strategies, emphasizing the importance of tax planning and compliance.
As international organizations increasingly implement tax and legislative reforms, partner with Auxadi to ensure your multinational is up to date with your tax obligations in Hong Kong and across 50+ jurisdictions. We are your strategic partner in international tax management.
Can Auxadi help?
Auxadi can become your ideal partner. We offer a one stop shop value added outsourcing services in the areas of accounting and reporting, tax compliance, payroll management and representation services, among others.
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