CentreO Blog

Subsidy Scheme for Employment Agencies with valid licence

The novel coronavirus epidemic has brought exceptional challenges to Hong Kong. The Hong Kong Government has responded to the needs of the Employment Agencies in an unprecedented manner. Hence, the Labour Department launched the Subsidy Scheme for Employment Agencies under the 6^th Round of Anti-epidemic Fund

One-off Lump Sum Subsidy

The scheme aims to assist Employment Agencies to tide over the difficulties arising the COVID-19 epidemic. The scheme will grant a one-off lump sum subsidy to below:

• $50,000 for each main licence of Employment Agencies that provide a foreign domestic helper placement service;
• $30,000 for each main licence of Employment Agencies that provide a non-foreign domestic helper placement service; and
• $10,000 for each duplicate licence for branch office of both kinds of Employment Agencies

Eligibility

An Employment Agency eligible for applying for a subsidy under the Scheme must:

• have held a valid licence issued by the Labour Department under section 52 of the Employment Ordinance (Cap. 57) as at 31 January 2022.  If the validity period of the current licence of the EA is less than two months on the date of subsidy application, the EA must have submitted an application for licence renewal to the Labour Department in accordance with Regulation 2 of the Employment Agency Regulations (EAR) (Cap. 57A); or
• have submitted an application for the issue of a new licence in accordance with Regulation 2 of EAR as at 31 December 2021, and the application was still under processing as at 31 January 2022.

If an Employment Agency has applied to the Labour Department for issue of a new licence or renewal of licence according to the above, the subsidy will only be disbursed after the licence application is approved.  For Employment Agencies meeting the requirement in item (i) above and intending to apply for a subsidy of $50,000, they will be required to declare that they had provided foreign domestic helper placement service on or before 31 January 2022, and may be required to submit documentary proof as necessary.  As for Employment Agencies meeting the requirement in item (ii) above, they can only apply for a subsidy of $30,000 as they have only been issued a new licence after 31 January 2022.

When and how to apply?

The scheme is open for application from 17^th March – 29^th April 2022. You can submit a completed the form and required document, and then send to Employment Agencies Administration of Labour Department. And then you can send via fax, post , email or in person during the application period.

If you submit your personal via fax or email, the Labour Department may ask the applicant concerned to provide the original copy of the documents for verification. However, Labour Department will not consider any late applications, incomplete applications or applications with late submission of the required documents. So, please check if you are submitting along with a completed application form and required documents and BEFORE 29^th April 2022.

For further information, please contact us.

You may want to read: THE PROPOSAL OF 6TH ROUND OF ANTI-EPIDEMIC FUND

Hong Kong’s finance chief on 22^th February, 2022 unveiled a costly HK$170 billion ($21.79 billion) budget. Including tax breaks and consumer spending vouchers, as the city reels under its worst coronavirus outbreak to date.

The budget will direct more resources to relieve people’s hardship and provide SMEs with some breathing space so as to stabilize the economy and maintain public confidence. Estimated deficit for 2022-2023 is $56.3 billion. Thus, the budget will continue to adopt an expansionary fiscal policy with initiatives mainly focusing on 4 areas:

1. supporting an all-out effort to win the fight against the epidemic;
2. relieving the hardship of our people and SMEs;
3. rendering support to the struggling economy and fostering post-epidemic economic revival; and
4. investing for the future by planning ahead for the medium- and long-term development of our economy.

Relieve people’s hardship

• Issue $10,000 electronic consumption vouchers to each eligible Hong Kong permanent resident and new arrival aged 18 or above.
• Introduce tax deduction for domestic rental expenses for taxpayers liable to salaries tax and tax under personal assessment. Subject to a deduction ceiling of $100,000 per year of assessment from 2022-2023. The deduction will not apply to a taxpayer who is the owner of the domestic property or an associate of the landlord of the rented property (eg, spouse, parent, child, brother/sister or partner of the taxpayer, or a corporation controlled by the taxpayer) or where the taxpayer receives a rent refund from the employer.
• Provide an extra half-month allowance of standard Social Security Assistance (CSSA) payments, Old Age Allowance, Old Age Living Allowance or Disability Allowance. Similar arrangements will apply to Working Family Allowance.
• Extend the 100% Personal Loan Guarantee Scheme for one year until the end of April 2023. And the ceiling will increase from $80,000 to $100,000. The maximum repayment period will extend to ten years.

Support Enterprises

• Introduce Rental Enforcement Moratorium for tenants of specific sectors through legislation.
• Further extend the application period of 100% guarantee low-interest loan for enterprises to the end of June 202. And raise loan ceiling to $9 million, extend repayment period and duration of principal moratorium.
• Extend the waivers/concessions of the existing 34 groups of government fees and charges for 12 months.
• Continue to grant the 75% rental/fee concession to eligible tenants of government premises/short-term tenancies and waivers for six months (100% concession for those closed at the Government’s request).

Enhance Economic Resilience and Enrich Industrial Development

• Provide tax concessions for the eligible family investment management entities managed by single-family offices with effect from 2022-2023.
• Provide half-tax concession to attract more maritime enterprises to establish a presence in Hong Kong.
• Issue no less than $15 billion of inflation-linked retail bonds, no less than $35 billion of Silver Bond and no less than $10 billion of retail green bonds in the next financial year.
• Set up a ‘Digital Economy Development Committee’ to accelerate the progress of digital economy.
• Allow stocks traded via the Southbound Trading of Stock Connect to be denominated in RMB. And roll out supporting measures such as waiving the stamp duty on stock transfers paid by market makers in their transactions to increase the liquidity of RMB-denominated stocks.
• Continue to proactively expand Hong Kong’s Comprehensive Avoidance of Double Taxation Agreements (CDTAs) network. At present, Hong Kong has signed 45 CDTAs and is in negotiations with 14 tax jurisdictions. With a view to minimising the risk of double taxation borne by foreign enterprises doing business in Hong Kong.

Rates Concession and Rating System

• Propose to limit future rates concession for domestic properties to one domestic property for each eligible owner who is a natural person starting from 2023-2024.
• Introduce from 2024-2025 progressive rating system for domestic properties. For domestic properties with annual rateable value of $550,000 or below. It is proposed that rates will continue to be charged at the present level of 5% of the rateable value. For domestic properties with rateable value over $550,000, it is proposed that rates be charged at 5% of the rateable value on the first $550,000 and at 8% of the rateable value on the next $250,000, and then at 12% on rateable value exceeding $800,000.

New International Tax Standards

• Plan to submit a legislative proposal to the LegCo in the second half of this year to implement the global minimum tax rate and other relevant requirements in accordance with the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) 2.0 framework targeting multinational enterprises (MNEs) with consolidated group revenue exceeding Euro 750 million.
• Consider introducing a domestic minimum top-up tax with regard to the aforesaid MNEs starting from the year of assessment 2024/25 to ensure that their effective tax rates reach the global minimum effective tax rate of 15 per cent so as to safeguard Hong Kong’s taxing rights.
• Reaffirm the Government’s stand to preserve the advantages of Hong Kong’s tax regime in terms of its simplicity, certainty and transparency, maintain the territorial source principle of taxation as well as minimise the compliance burden on MNEs when implementing BEPS 2.0.

Still, this is the proposal and subject to final approval from the Legislative Council.

For further information, please contact us.

You may want to read: THE 2021-2022 BUDGET TARGETS ON REVIVING THE ECONOMY

Hong Kong Government announced to launch a new tranche of Employment Support Scheme (ESS). Due to the 5^th wave of COVID attacked hardly on the economy, the government budgets $26-$31 billion wage subsidy to safeguard local jobs.

What is the objective of ESS?

The Employment Support Scheme aims to speed up the economy recovery and resumption from the 5^th Wave of COVID. The experience of the 1^st round ESS in 2020, the government focused on supporting the affected industries, small and medium-sized enterprises (SMEs).

The practice of the wage subsidy will be the same as 2020. The wage subsidy will be granted to eligible employers. Then the employers to pay for May, June and July 2022 salary.

What are the criteria of ESS?

1. $8000 per month per employee with monthly salary less than $30,000.
2. The employers have to propose the number of subsidised employees. And the ceiling of subsidised employee is less than previous ESS in 2020.
3. During the ESS period, the number of employee should NO LESS than the number of proposed in the application.

Who is NOT eligible under the ESS?

For the new tranche of ESS, Supermarket and pharmacy chain store, property management, banks, financial institutions, express delivery, telecommunications are excluded.

Still, the new tranche of ESS needs approval from the Legislative Council. And the government will contact chambers of commerce, employer’s federations and trade unions to refine the details of the scheme. The subsidy schedules to payout in April.

For further information, please contact us.

You may want to read: Second Employment Support Scheme for Wage Subsidies