Following the first relief package and anti-epidemic fund announced in February, on 8 April, the Hong Kong SAR Government unveiled a HK$137.5 billion (US$18,000 billion) second relief package to help individuals and businesses through the current economic downturn caused by the COVID-19 crisis.
The latest relief measures encompass the introduction of an Employment Support Scheme, the provision of subsidies to support hard-hit sectors and the deferment in payment of taxes that aims to alleviate the financial burden on the local community.
Employment Support Scheme
The highlight of the relief package is the six-month wage subsidy measure for the private sector in Hong Kong in an effort to enable employers to keep their staff employed. Outlined below are key measures of the Scheme which may be applicable to your business.
Key criteria:
- Provision of wage subsidies to eligible employers to retain their employees in return for employers undertaking not to implement any redundancies.
- All employers making Mandatory Provident Fund (MPF) contributions for employees will be eligible (except the HKSAR Government, statutory bodies and Government-assisted organisations).
Calculation:
- Government subsidies are calculated on the basis of 50% of wages, subject to a wage cap of HK$18,000 per month (i.e. monthly subsidy capped at HK$9,000) for a period of six months.
Target effective date:
- Disbursement to employers will be made in two payments, with the first no later than June 2020.
Additional measures:
- Provision of support to employers in the catering, construction and transportation sectors which are not completely covered by the MPF scheme.
- Granting of a one-off subsidy to self-employed persons who made MPF contributions.
Providing relief to hard-hit sectors
The Government will provide a one-off relief grant under the Anti-epidemic Funds 2.0 estimated at HK$21 billion to support the sectors and industries which have been severely affected by the extraordinary damages caused by the pandemic crisis.
Easing the cash flow and burden of businesses and individuals
The Government will enhance the SME Financing Guarantee Scheme and defer automatically payment of salaries tax, personal assessment and profits tax due for payment in April, May and June 2020 by three months.
HOW WE CAN HELP
- Our Hong Kong team continues to closely monitor the latest updates as soon as they are announced by the relevant Government departments in order to stay on top of the application procedures and requirements of various relief measures. We will keep you posted on further details when they become available.
- Our Payroll Services team will support to validate the eligibility and manage the applications for the Employment Support Scheme.
- Our Tax Compliance Services team will provide assistance with the filing of tax returns and the supplementary forms, and follow up with any additional disclosure requirements for tax filing if necessary.
Originally published 15th April, 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.