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PRESS RELEASE

(Source : Government Information Centre)

Business Registration Fee waived for one year

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In his 2002-03 Budget Speech, the Financial Secretary Mr Antony Leung proposed to waive business registration fee for one year. The waiver is proposed to take effect from April 1, 2002.

Under the Revenue (Variation and Reduction of Fees and Charges) Order 2002 gazetted on March 12, the business and branch registration fee payable in respect of certificates commencing during the period April 1, 2002 to March 31, 2003 will be waived. For 3-year certificates, the business and branch registration fees will also be reduced by $2,000 and $73. It is anticipated that 620,000 businesses will benefit from the concession.

A spokesman for the Inland Revenue Department (IRD) said today (April 2) that the Revenue Order only waives the payment of registration fee. Business operators still need to apply for business or branch registration certificates and pay the levy of $250 per year to the Protection of Wages on Insolvency Fund (PWIF).

As from today, IRD will charge certificates commencing during the period April 1, 2002 to March 31, 2003 as follows:

For those who elect for 1-year certificates, the business and branch registration fees will be reduced by $2,000 and $73 respectively to $0. Meanwhile, for 3-year certificates, registration fees will be reduced by $2,000 and $73 to $3,200 and $116 respectively.

The Revenue Order will not cover businesses which have already paid registration fees for the financial year 2002-03 and are not required to renew their registration certificates during the concessionary period. They include:

(1) Those which hold a 3-year registration certificate with an expiry date on or after March 31, 2003; or

(2) Ceased businesses or ceased branches, which last held a registration certificate with an expiry date between April 1, 2002 and March 31, 2003.
The spokesman said as a matter of fairness, the Government will consider any application for refund on a pro-rata basis from the above two types of businesses. It is estimated that about 5,000 3-year registration certificate holders and 80,000 ceased businesses are eligible for refund application.

"From April 17, 2002 to September 30, 2003, businesses that will be considered for refund on application may apply to the Commissioner of Inland Revenue for refund of the registration fees they have paid in respect of the period April 1, 2002 to March 31, 2003," the spokesman said.

"Upon receiving an application, IRD will calculate the refund amount on a pro-rata basis by reference to the certificate's validity period that falls within the year 2002-03. The amount of refund will differ from case to case according to the individual circumstances of the business," the spokesman added.

IRD will make available a standard form (IRBR188) to facilitate applications. The form will be sent out in the latter part of April to ceased businesses that have left IRD with a correspondence address, as well as to holders of 3-year certificates that will be considered for refund on application.

The form can also be obtained from IRD Head Office and sub-offices, or from the IRD homepage - http://www.info.gov.hk/ird. The department will make refunds to successful claimants within 25 working days of receipt of their valid applications.

Ends/Tuesday, April 2, 2002

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Appendix

Example One

A business last held a certificate with a validity period running from 1.2.2002 to 31.1.2003 before its cessation, the fee paid in respect of the period 1.4.2002 to 31.1.2003 (306 days) will be refundable on a pro-rata basis. The refund amount will be $1,677 ($2,000 x 306/365).

Example Two

For 3-year certificates, the current fee of $5,200 is made up of $2,000 for the first year and $1,600 each for the second and the third year.

For a business which holds a 3-year certificate with a validity period running from 1.2.2002 to 31.1.2005, the fee paid in respect of the period 1.4.2002 to 31.3.2003 will be refundable. The period 1.4.2002 to 31.1.2003 represents 306 days in the first year. The refund amount will be $1,677 ($2,000 x 306/365). The period 1.2.2003 to 31.3.2003 represents 59 days in the second year. The refund amount will be $259 ($1,600 x 59/365), making it $1,936 in total.