Enhanced Tax Deduction for R&D Expenditures

Enhanced Tax Deduction for R&D Expenditures

The Enhanced Tax Deduction provides for expenditure incurred by enterprises on qualifying research and development (R&D) activities in order to encourage more enterprises to conduct R&D activities in Hong Kong. The deduction will be 300% for the first $2 million of the aggregate amount of payments made to “designated local research institutions”(DLRI) for “qualifying R&D activities” and “qualifying expenditures” incurred by the enterprises, and 200% for the remaining amount. There is no cap on the amount of enhanced tax deduction.

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VIEW IRD’S DEPARTMENTAL INTERPRETATION AND PRACTICE NOTES