Mr. LAM Sai-hung, GBS, JP
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Mr. LAM Sai-hung, GBS, JP
Secretary for Transport and Logistics

Additional tax concessionary measures roll out, to fortify Hong Kong’s position as a global and logistics hub

23 July, 2022

With over 80% of global freight volume carried by water today, the demand for water transport will likely continue to spur demand for high-end maritime services. With the shift of the global economic centre of gravity from the West to the East, more than half of world’s seagoing merchant fleet in terms of number of vessels was owned by Asia, maritime services are expected to see robust demand from Asia.

To consolidate Hong Kong’s position as an international maritime centre and promote the city’s sustainable economic development, we spare no effort in driving the growth of Hong Kong’s high value-added maritime services. To this end, we have further introduced half-rate profits tax concessions (i.e. at a tax rate of 8.25 per cent) to ship agents, ship managers and ship brokers this year.

Ship agency, ship management and ship broking businesses are important maritime business services supporting international shipping activities. Ship agents refer to parties who represent ship owners, charterers or ship lessors at ports to facilitate efficient port calls of ships, their services typically include handling cargo operation matters with the port, seeking clearance for ships from relevant authorities and provision of port and husbandry services. Ship managers provide management services usually relating to the management of technical, crew and commercial aspects of a vessel, as well as its insurance arrangements, for a ship to render it fit and safe for operation and voyage. Ship brokers act on the interests of different ship users including but not limited to ship owners, charterers, ship lessors, prospective ship buyers or lessees to facilitate the conclusion of business deals relating to a ship among different ship users.

Upon the gazettal of the Inland Revenue (Amendment) (Tax Concessions for Certain Shipping-related Activities) Ordinance 2022 yesterday, the relevant tax concessions are applicable to the sums received by or accrued to the above shipping commercial principals on or after April 1, 2022. The newly implemented tax measures would provide economic incentives for them to operate in Hong Kong, generating demand for other maritime business services, and are conducive to fostering our shipping business and maritime cluster, thereby strengthening our position as an international maritime centre.

For further information of the newly implemented measures:
https://www.info.gov.hk/gia/general/202207/22/P2022072100409.htm?fontSize=1

We will join hands with members of the Hong Kong Maritime and Port Board and Invest Hong Kong to publicise the newly introduced tax regime through promotions and briefings to the trade. We will make use of the visits and exhibitions of Hong Kong Maritime and Port Board in overseas countries and in the Mainland, as well as regional and international maritime events and conferences, to promote the new tax concessionary measures to relevant maritime organisations and shipping companies.

In addition, the 6th edition of the Hong Kong Maritime Week hosted by Hong Kong Maritime and Port Board will take place from 20th to 26th November 2022 in a hybrid format, to promote Hong Kong as the preferred base for operating maritime business.

Over the years, we have implemented a series of tax measures to help attract the setting up of high value-added maritime business establishments in Hong Kong, including the introduction of tax exemption and concessions in 2020 to qualifying ship leasing activities by ship lessors and ship leasing managers, and marine insurance businesses respectively.

For further information:
Ship leasing business:
https://www.hkmpb.gov.hk/en/news/20200619a.html
Maritime Insurance Business:
https://www.info.gov.hk/gia/general/202101/15/P2021011400482.htm?fontSize=1

The "Outline of the 14th Five-Year Plan for National Economic and Social Development of the People's Republic of China and the Long-Range Objectives Through the Year 2035" and the "Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area" support consolidating Hong Kong's position as an international maritime centre. Hong Kong serves as a bridge to integrate and contribute to the “dual circulation” development strategy of our country. We will continue to be devoted on the development of high value-added maritime services in Hong Kong with a view to integrating into the country's development course and connecting to the global community.

The End