Hong Kong’s Legislative Council has passed a bill to reduce the profits tax for certain insurance businesses.

The Inland Revenue (Amendment) (Profits Tax Concessions for Insurance-related Businesses) Bill 2019 was passed by the Legislative Council on July 15, 2020.

The legislation will halve the profits tax rate for all general reinsurance business of direct insurers, selected general insurance business of direct insurers, and selected insurance brokerage business. The new rate will be 8.25 percent.

Christopher Hui, the Secretary for Financial Services and the Treasury, said that the changes will promote the development of Hong Kong’s marine and specialty risk insurance industry.

The Government and Insurance Authority will prepare subsidiary legislation and work out the details for implementing the measure. The aim is for the rate cut to be in place by the end of 2020 or in early 2021.