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Foreword
Introduction
About HLB International
General Information
Trade, Monetary, Financial & Legal System
Statutory Audit Requirements
Hong Kong Tax Structure
Setting up Companies in Hong Kong
Listing on the Hong Kong Stock Exchange
Doing Business in HK
Hong Kong Tax Structure
Stamp and Capital Duty

Stamp Duty

The transfer of Hong Kong stock (whether private or publicly quoted) must be stamped. The rate of duty is 0.1% payable by each of the purchaser and seller involved in a transaction, giving an effective rate of 0.2%. Duty is charged on the sales consideration or the fair market value, whichever is the higher.

In evaluating the fair market value, the Stamp Duty Office will normally accept the net asset value shown by the company’s audited accounts, subject to an upward adjustment to reflect a higher value for land and buildings than that shown in the accounts, where appropriate. No Stamp Duty is charged in the case of transfers of shares or immovable properties within a group of companies, where both parties are under 90% (or more) common ownership.

As from 1 April 2010, duty at a maximum rate of 4.25% is payable on the transfer of immovable properties located in Hong Kong where consideration exceeds HK$21,739,120.

For lease of immovable property in Hong Kong, stamp duty is calculated at rates which vary with the term of the lease.

Currently, the applicable rate ranges from 0.25% of the total rent over the term of the lease (for lease period of not more than one year) to 1% of the yearly or average yearly rent (for lease period of more than three years).

Stamp duty is also chargeable to units in unit trusts and to Hong Kong bearer instruments as well as duplicates of any chargeable instruments.

Special Stamp Duty

With effect from 20 November 2010, unless the transaction is exempted from Special Stamp Duty (“SSD”) or SSD is not applicable, any residential property acquired on or after 20 November 2010, either by an individual or a company (regardless of where it is incorporated), and resold within 24 months (the property was acquired on or after 20 November 2010 and before 27 October 2012) or 36 months (the property was acquired on or after 27 October 2012), will be subject to SSD.

SSD is calculated by reference to the stated consideration or the market value of the property (whichever is the higher), at the following rates for different holding periods of the property by the seller or transferor before disposal:

Holding period The property was acquired on or after 20 November 2010 and before 27 October 2012 The property was acquired on or after 27 October 2012
6 months or less 15% 20%
More than 6 months but for 12 months or less 10% 15%
More than 12 months but for 24 months or less 5% 10%
More than 24 months but for 36 months or less - 10%

Buyer's Stamp Duty

Unless specifically exempted, Buyer’s Stamp Duty (“BSD”) is payable on an agreement for sale or a conveyance on sale for the acquisition of any residential property executed on or after 27 October 2012, except where the purchaser or the transferee is a Hong Kong permanent resident (HKPR) acquiring the property on his/her own behalf (i.e. the person is both the legal and beneficial owner).

BSD is charged at 15% on the stated consideration or the market value of the property (whichever is the higher).

Ad valorem stamp duty (commonly referred to as “double stamp duty”)

For any residential property and non-residential property acquired on or after 23 February 2013, either by an individual or a company, will be subject to higher rate (referred to as ad valorem stamp duty), except that acquired by a Hong Kong Permanent Resident acting on his/her own behalf and does not own any other residential property in Hong Kong at the time of acquisition or other exemption applies.

With effect from 5 November 2016, Ad valorem stamp duty (“AVD”) at Scale 1 are divided into Part 1 and Part 2. Part 1 of Scale 1 applies to instruments of residential property and Part 2 of Scale 1 applies to instruments of non-residential property and certain instruments of residential property executed on or after 23 February 2013 but before 5 November 2016. Part 2 of Scale 1 is in essence the prevailing AVD at Scale 1 rates before 5 November 2016. The rates at Scale 1 are as follows:

Part 1 of Scale 1 (Applicable to instruments of residential property executed on or after 5 November 2016 ): A flat rate of 15% of the consideration or value of the property (whichever is the higher)

Part 2 of Scale 1 (Applicable to instruments of residential property executed on or after 23 February 2013 but before 5 November 2016 and instruments of non-residential property executed on or after 23 February 2013):

Consideration or value of the property (whichever is the higher) Rates at Scale 1 (Part 2)
Up to $2,000,000 1.50%
$2,000,001 to $2,176,470 $30,000+20% of the excess over $2,000,000
$2,176,471 to $3,000,000 3.00%
$3,000,001 to $3,290,330 $90,000+20% of the excess over $3,000,000
$3,290,331 to $4,000,000 4.50%
$4,000,001 to $4,428,580 $180,000+20% of the excess over $4,000,000
$4,428,581 to $6,000,000 6.00%
$6,000,001 to $6,720,000 $360,000+20% of the excess over $6,000,000
$6,720,001 to $20,000,000 7.50%
$20,000,001 to $21,739,130 $1,500,000+20% of the excess over $20,000,000
$21,739,131 and above 8.50%

Capital Duty

The capital duty had been abolished effective as of I June 2012.