Global Daily Tax News, Hong Kong Introduces Telecoms Sector Tax Breaks, (Jan 22, 2024)

The Hong Kong Government has published the Inland Revenue (Amendment) (Tax Deductions for Spectrum Utilization Fees) Ordinance 2024 in the Official Gazette, providing for tax deductions for spectrum utilization fees (SUF) payable by mobile network operators (MNOs) on radio spectrum acquired in the future.

The Amendment Ordinance took immediate effect on the date of its publication, January 19, 2024.

The measure provides for tax deductions for spectrum utilization fees (SUF) payable by mobile network operators (MNOs) on radio spectrum acquired in future auctions. The measure is intended to encourage MNOs to invest more proactively in telecommunications infrastructure.

The Government proposes that the SUF payable by MNOs for the radio spectrum to be acquired in future auctions is to be fully deductible, and the tax deduction will be spread over the spectrum assignment term (generally 15 years).

The measure has no retrospective effect and will only be applicable to the SUF derived in auctions conducted on or after the commencement of the Bill.