Or for oral questions on government bills this council receives the second reading debate on the Inland Revenue Amendment number three bill 2018 mr. Kelly flown chairman of the bills Committee on the bill will first address the council on the committee’s report mr. Lau I thought you said thank you madam deputy capacity as chairman of the bills Committee on.
Inland Revenue amendment number three bill 201 8 I wish to make a report on the.
Work of the bills committee I will focus on the major issues considered by the bills committee the main objective of the bill is to implement.
An enhanced tax deduction regime for qualifying research and development activities at present section 16 B of the Inland Revenue ordinance allows 100% deduction for expenditures on outsourced R&D and in-house R&D activities under the proposed regime R&D expenditures eligible for deduction under the new section 16 B in the bill are classified into either type a expenditures which qualify for 100% deduction or type B expenditures which qualify for enhanced tax deductions that is 300% for the first two million dollars of the.
Total amount of expenditures and 200% of the remaining amount members of the bills.
Committee generally supported the bill the bills committee has examined among other issues the various conditions and situations under which expenditures on R&D activities are eligible for the enhanced tax deduction under the proposed regime a qualifying.
R&D activity related to a trade profession or business would qualify for the enhanced tax deduction under Section five of the new schedule 45.
The meaning of qualifying R&D activity related to a trade professional business includes a qualifying R&D activity that may lead lead to or facilitate an extension or an improvement in the technical efficiency.
Of the trade profession or business and a qualifying R&D activity of a medical nature that is of particular relevance to the welfare of employees employed it in the trade profession or business the bills committee has examined which types of R&D projects would fall within such definition and thus would qualify for the enhanced deduction the administration has advised that in determining whether an R&D project is a qualifying R&D activity it is necessary to consider all.
The relevant facts including the state of knowledge and technology at the commencement of the project the scientific or technological uncertainties involved as.
General rule if an R&D projects is to directly contribute to achieving an advance in science or technology by resolving scientific or technological uncertainty it would be regarded as a qualifying R&D activity to enable the Inland Revenue Department to process taxpayers claims efficiently taxpayers should provide fuu and.
Accurate information in the tax returns and sufficient supporting documents upon request if necessary the Commissioner of Inland Revenue may consult the Commissioner.
For innovation and technology on any technical issues involved if an enterprise wishes to know whether is planned at R&D project missed the requirements of qualifying R&D activity and or the expenditures to be incurred eligible for enhanced tax deduction it could.