With effect from the year of assessment 2018/19, Tax Department has introduced two-tiered profits tax rates for corporations and unincorporated businesses by lowering the tax rate for the first $2 million of assessable profits. However, for two or more connected entities, only one of them may elect the two-tiered profits tax rates.
Under the two-tiered profits tax rates regime, the profits tax rate will be changed as follows:
- First $2 million of assessable profits will be lowered to 8.25%.
- Assessable profits above $2 million will continue to be subject to the rate of 16.5% for corporations.
