Views on aircraft tax regime sought

November 22, 2022

The Transport & Logistics Bureau today launched a consultation on proposals to enhance the aircraft leasing preferential tax regime.


The regime was introduced in 2017 to provide global industry players with competitive tax concessions in Hong Kong compared with other places. Since then, a number of major industry players from the Mainland and overseas have set up subsidiaries or operating arms in the city.


The Government proposals are under five categories: provision of tax deduction on the acquisition cost of aircraft; expansion of the scope of lease and aircraft leasing activities; deduction of interest payable on money raised to finance the aircraft acquisition; introduction of a threshold requirement to comply with Organisation for Economic Co-operation & Development (OECD) requirements; and specification of the leasing model involving the use of a bare trust.


The bureau said these measures aim to enhance the competitiveness of Hong Kong in view of the rapid market changes over the past few years and taking into account the international tax reform spearheaded by the OECD on base erosion and profit shifting.


The Government will invite aircraft lessors, aircraft leasing management companies, professionals from trade-related sectors such as accounting, finance and legal personnel as well as relevant trade associations to offer their views.


Submissions can be sent via email by December 19.


Click here to download the consultation document and feedback form.

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