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Hong Kong Tax Deduction for Environment-friendly Vehicles

Discussion in 'Hong Kong' started by Vmax, Jun 12, 2014.

  1. Vmax

    Vmax Member

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    Quite interesting:

    "For eligible environment-friendly vehicles, full deduction of cost will be allowed in the year of purchase. This is the same as the full deduction of capital expenditure presently allowed for "prescribed fixed assets" (which are mainly manufacturing and computer equipments) and "environmental protection machinery"

    FAQ on Tax Deduction for environment-friendly vehicles
     
  2. DITB

    DITB Charged.hk co-founder

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    Is this for personal or company taxes?
     
  3. CCT

    CCT Member

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    Company (profit) tax.
     
  4. DITB

    DITB Charged.hk co-founder

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    What if the car is privately owned by the owner of a company, can it still be counted? I am not so well versed in running a business in Hong Kong (yet), so for the time being I ordered the car privately, to keep things simple (no activity in my company yet).
     
  5. lx3h

    lx3h Charged.hk TSLA Grp Rep

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    Anyone knows how to register as a company and the cost of the registration such that the Model S purchase as "prescribed fixed assets"?
     
  6. Vmax

    Vmax Member

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    Tax Deduction for Environment-friendly Vehicles

    My accountant and auditor are still checking the details.
    However one thing is sure, the car must be purchased by a company. If the car has been purchased by a private individual, this tax deduction can't be applied.
     
  7. EBill

    EBill Member

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    Setting up a (ltd) company is HK is very easy and relatively inexpensive compared to most countries. If using an external agency to do the paperwork, etc. you can set up a company for less than HK$4k and less than a month. If you do it yourself it is even faster and cheaper.

    Anxious to find out about the details from my accountant as well.

    A key point to remember is the company needs to make more money than the expenses to be a useful deduction.
     
  8. Ampster

    Ampster Member

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    Could the OP or Mod add Hong Kong to the title.
     
  9. CCT

    CCT Member

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    That's the thing. Your company has to make profit and the profit itself (above a certain threshold) is taxable. If you're only setting up a shell company for the sake of deducting the cost of the Model S, in such case, you either have to have proper business to generate enough taxable cash flow for the cost of the Model S to be deducted from, or it is purely a shell and operates no business and the cost of the Model S isn't deductible. Unless you can find ways to 'fake' profits (not recommended), but then those profits themselves will be subject to taxation which might not turn out to be beneficial after all...
     
  10. DITB

    DITB Charged.hk co-founder

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    You are already in the Hong Kong forums. Things discussed here are about Hong Kong mainly, and prices mentioned are in HKD, rather than USD, unless otherwise specifically mentioned.

    Having said that, adding Hong Kong wouldn't cost anything. Mark?
     
  11. Vmax

    Vmax Member

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    It's confirmed by my auditor, to have 100% depreciation as tax allowance on the first year of purchase.
     
  12. markwj

    markwj Moderator, Asia Pacific

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    Moderator's Note: Added 'Hong Kong' to the title, for clarity.
     

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