Waiver of Business Registration Fees for One Year

(from 1 April 2012 to 31 March 2013)

The Financial Secretary proposed to waive the business registration fees for one year, starting from 1 April 2012. The Government will introduce the relevant budget legislation into the Legislative Council as soon as possible to effect the proposal.

Implementation Details of the Waiver of Business Registration Fees

In respect of local companies registered under the One-stop company incorporation and business registration regime ("One-stop Registration"), the fees payable under section 5A(1)(a) will be reduced by a sum of $2,000 if the related incorporation applications are made within the period from 1 April 2012 to 31 March 2013 ("Waiver Period"). For other cases, the fees payable in respect of business registration certificates and branch registration certificates with commencement date falling within the Waiver Period will be reduced by a sum of $2,000 and $73 respectively.
Businesses are still required to pay the levy for the Protection of Wages on Insolvency Fund.
Please refer to the business registration fee & levy table for details of the total amount payable in respect of a certificate.

Concessionary Refund of Registration Fees Paid.
The proposal only relates to the waiver of one year registration fees for the incorporation applications made under the One-stop Registration within the Waiver Period or, in other cases, new certificates or renewal certificates with commencement date falling within the Waiver Period. It does not provide for the refund of fees paid in respect of the Waiver Period.

In order that the waiver can also benefit those businesses that have paid the registration fees for the Waiver Period but are not required to renew their certificates in such period, concessionary refunds of the relevant amount of business registration fees paid will be allowed to them, upon applications. They include the following:-

(a)

Businesses or branches, which hold a 3-year registration certificate with a commencement date before 1 April 2012 and an expiry date on or after 31 March 2013;

(b)

Ceased businesses or branches, which last hold a 1-year registration certificate with a commencement date between 1 August 2011 and 31 March 2012;

(c)

Ceased businesses or branches, which last hold a 3-year registration certificate with an expiry date between 1 April 2012 and 31 March 2013; and

(d)

Local companies registered under the One-stop Registration, which make incorporation applications between 1 August 2011 and 31 March 2012 and hold a 1-year or 3-year registration certificate with a commencement date between 1 April 2012 and 31 March 2013.

The relevant amount of the concessionary refund is the amount of business registration fees paid on a pro-rata basis, in respect of the number of days in the Waiver Period (see item 1 above) which are covered by the business registration certificate in question. The IRD will announce the application and refund procedures after the relevant budget legislation is passed by the Legislative Council.

FAQ

Q1:

Do I need to pay the levy for the Protection of Wages on Insolvency Fund for the Waiver Period?

A1:

Yes, the levy for the Protection of Wages on Insolvency Fund will continue to be payable.

Q2:

Can a company incorporated or registered under the Companies Ordinance apply for concessionary refund if it has ceased business within the Waiver Period?

A2:

Normally, a company cannot claim refund of the business registration fee paid if it ceases business during the period covered by the business registration certificate, since under the Business Registration Ordinance, a company incorporated or registered under the Companies Ordinance is deemed to be a person carrying on business notwithstanding its cessation of business.

However, under the concessionary refund scheme, where the company is holding a 3-year certificate with a commencement date before 1 April 2012 and an expiry date on or after 31 March 2013, it can apply for concessionary refund in respect of the Waiver Period, i.e. 1 April 2012 to 31 March 2013, WHETHER OR NOT the company has ceased business during the Waiver Period.

Besides, local companies registered under the One-stop Registration, which make incorporation applications between 1 August 2011 and 31 March 2012 and hold a 1-year or 3-year registration certificate with a commencement date between 1 April 2012 and 31 March 2013, can also apply for concessionary refund in respect of the Waiver Period, i.e. 1 April 2012 to 31 March 2013 (see Q5 below).

Please refer to A6 below on how the refund will be calculated.

Q3:

Can a business operator who registered his business in June 2011 with a 1-year business registration certificate and who is not required to renew the registration certificate because of cessation of business apply for concessionary refund?

A3:

No. The business registration fee was already waived under the Revenue (Reduction of Business Registration Fees) Order 2010.

Q4:

My company registered its business under the One-stop Registration in January 2012. How can it benefit from the proposed waiver?

A4:

When the company renews its registration certificate in January 2013, the fee payable will be reduced by a sum of $2,000.

Q5:

I will apply for company incorporation before the end of March 2012. If the commencement date of the 3-year business registration certificate of my company falls in April 2012, can I only pay the levy when making the application under the One-stop Registration?

A5:

No. The proposed waiver of one-year registration fees applies to the related company incorporation applications which are made under One-stop Registration within the period from 1 April 2012 to 31 March 2013. You must settle the full amount of $6,550.

After the relevant budget legislation is passed by the Legislative Council, your company may apply for concessionary refund of the business registration fee paid in respect of the period from the commencement date of the certificate to 31 March 2013. Please refer to A6 below on how the refund will be calculated.

Q6:

How is the amount of concessionary refund going to be calculated?

A6:

The amount to be refunded will be calculated by reference to the number of days in the validity period of the certificate held by the business, the number of such days within the Waiver Period (i.e. 1 April 2012 to 31 March 2013) for which the concession applies, and the actual amount of fees paid on the certificate. The detailed calculations with examples will be announced after the relevant budget legislation is passed by the Legislative Council.