Further to the Association circulars issued on the subject matter, we have received quite many member enquiries about the implications of the new arrangements for their (individual) companies.

Briefly, In 2023-24 Budget, the Financial Secretary announced that Hong Kong planned to apply the global minimum effective tax rate of 15 per cent on multinational enterprise groups with annual consolidated revenue of at least 750 million euros under the BEPS 2.0 package and implement the Hong Kong minimum top-up tax (HKMTT) from 2025 onwards. For this purpose, the Financial Services and the Treasury Bureau (FSTB) has commenced a consultation exercise to gather views on the specific implementation issues. The consultation paper is available on the website of the FSTB (https://www.fstb.gov.hk/tb/en/others/consultation.htm). Members who wish to share their views with the government, they may write to beps@fstb.gov.hk by 20 March 2024.

We would also like to advise members to seek expert advice on whether their (individual) companies might be affected by the Hong Kong minimum top-up tax. The reason is that while the global anti-base erosion rules provide an exclusion for international shipping income and qualified ancillary international shipping income, it is fairly common for shipping groups to have income streams that do not fall within the exclusion scope. Hence, shipping groups may wish to take action now to assess the potential impact of BEPS 2.0 Pillar Two on their different streams of income and plan ahead for the way forward.

If members are interested in attending the joint seminar hosted by the Association and PricewaterhouseCoopers tomorrow morning, 17 January 2024, please refer to Association circular A(23)221 dated 19 December 2023 for registration.

Thank you for your attention.