The Inland Revenue (Amendment) (No. 7) Bill 2017 will be gazetted on December 29 to implement the two-tier profits tax rates regime as announced in the 2017 Policy Address.

Under the proposal, the tax rate for the first $2 million of company profits will be cut to 8.25%, while profits above that amount will continue to be subject to the 16.5% tax rate.

For unincorporated businesses, mostly made up of partnerships and sole proprietorships, the two-tier tax rates will correspondingly be set at 7.5% and 15%.

The Government said the new profits tax system will help foster a favourable business environment, drive economic growth and enhance Hong Kong's competitiveness.

Under the new regime, tax-paying corporations and unincorporated businesses may save up to $165,000 and $150,000 respectively each year.

The bill will be tabled in the Legislative Council on January 10.