HONG KONG, May 28 (Xinhua) -- Hong Kong's Legislative Council on Wednesday passed a bill enabling the implementation of the global minimum tax (GMT) and the Hong Kong minimum top-up tax (HKMTT) in Hong Kong from Jan. 1, 2025, onwards in accordance with the Base Erosion and Profit Shifting (BEPS) 2.0 package for tackling tax evasion risks arising from the digitalization of the economy.

China's Hong Kong Special Administrative Region (HKSAR) government on Wednesday welcomed the passage of the Inland Revenue (Amendment) (Minimum Tax for Multinational Enterprise Groups) Bill 2024.

Christopher Hui, Secretary for Financial Services and the Treasury of the HKSAR government, said that the implementation of the GMT and the HKMTT highlights Hong Kong's staunch support to international cooperation in tackling cross-border tax evasion, and safeguards Hong Kong's taxing rights.

With the 15 percent GMT for in-scope multinational enterprise (MNE) groups in place, countries and regions can no longer compete for capital and investment by simply lowering their corporate income tax rates. With a fairer global taxation environment, Hong Kong's unique advantages, including "one country, two systems," excellent connectivity, first-class infrastructure, mature financial markets, quality talent pools, and East-meets-West vibes, will become even more accentuated to showcase Hong Kong as a premier destination for doing business, Hui said.

Under the BEPS 2.0, with the implementation of the HKMTT, the HKSAR government will have the first priority in collecting top-up tax from entities of in-scope MNE groups with an effective tax rate in Hong Kong below 15 percent to raise it to 15 percent. Otherwise, the relevant top-up tax may be collected by other BEPS 2.0-implementing jurisdictions in which the group also operates.

Hong Kong's taxing rights would then be ceded to other jurisdictions. It is estimated that the new regimes will bring in an additional revenue of about 15 billion HK dollars (about 1.91 billion U.S. dollars) per year from 2027 to 2028 to the HKSAR government. (1 U.S. dollar = 7.83 HK dollars) Enditem