As of the current financial year, qualified companies can have their profits tax halved (from 16.5 per cent to 8.25 per cent), and see all their interest expenses become tax deductible if they choose to set up a CTC in Hong Kong.What is a CTC? How is it brilliant?
Professional services firm PwC explains a CTC as being, in effect, an organisation’s “in-house bank,” responsible for a range of finance functions, including regional processing of payments, liquidity management, intra-group financing and capital-raising.In essence each company that becomes its own bank will get tax advantages.
No sane people allows government to handle money, and three private companies issue the currency in Hong Kong. USA has a similar legal fiction, with nine regional fed orgs owned by private banks, but it is hegemon controlled.
It sure sounds to me like Hong Kong will cut taxes on anyone who does vendor financing out of Hong Kong. Further, you can run any other theory-based financial regime out of Hong Kong.
Hong Kong is not really anarchistic, it is polyarchistic. that is it tolerates many regimes within one polity. Nice trick to pull off.
I expect Hong Kong to win the FinTech capital race, simply because they keep cutting taxes on winners. Way to go, and way to be a the heart of the Belt and Road initiative.
Will USA now start cutting taxes?
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