Author｜Bailu Living Room
Source: Hong Kong Ta Kung Pao
On June 29, Hong Kong Ta Kung Pao issued an article: Investment in virtual assets in Hong Kong will not be levied asset value-added tax, and it has great advantages in developing the virtual asset market. At the same time, he said that this move is very attractive to global investors. For example, in Japan and Australia, although they have vigorously expanded the virtual asset market earlier than Hong Kong, Japan and Australia both need to pay asset appreciation tax, and relevant taxes will be Including the comprehensive tax rate calculation, the comprehensive tax rates in Japan and Australia can be as high as 50% and 40% respectively.
For investors, investment return is of course the most important consideration, and Hong Kong’s low tax system will attract more international investors to Hong Kong.
The following is the original article:
The 27th anniversary of Hong Kong's return to the motherland is approaching, and the local financial industry is developing by leaps and bounds. The SAR government proposed the goal of establishing a global virtual asset center in 2022. Subsequently, many digital economy conferences were crowded with people, attracting a large number of virtual asset industry leaders to Hong Kong to attend the conference.
It is worth noting that last year the SAR government introduced a series of rules such as licensed platform supervision, which greatly enhanced the confidence of global investors in Hong Kong's virtual asset market. As a result, many talents and technology companies have returned to Hong Kong for development. The industry generally believes that Hong Kong's advantages in developing the virtual asset market are becoming more and more obvious.
OSL Group (00863) Chief Financial Officer Hu Zhenbang said that the SAR government’s declaration on virtual assets in 2023 has indeed strengthened the confidence of the industry. There was a time when some virtual asset-related companies moved from Hong Kong to Singapore for development, but in the past year a large number of these companies have returned to Hong Kong, which shows that there is greater confidence in the future development of Hong Kong’s virtual asset market.
VAT-free, favored by investors
In fact, Hong Kong has great advantages in developing the virtual asset market. The first is the tax rate. Hong Kong's investment in virtual assets will not be subject to capital gains tax, which is very attractive to global investors. For example, in Japan and Australia, although they have vigorously developed the virtual asset market earlier than Hong Kong, both Japan and Australia need to pay capital gains tax. The relevant taxes will be included in the comprehensive tax rate calculation. The comprehensive tax rates in Japan and Australia can be as high as 50% and 40% respectively. For investors, investment return is of course the most important consideration, and Hong Kong's low tax system will attract more international investors to Hong Kong.
Lu Zhihong, managing partner of Deloitte China Digital Assets Hong Kong, said that the Hong Kong financial market has been developing for many years and has experienced storms such as the Asian financial crisis in 1997 and the financial tsunami in 2008. The supervision of the capital market and financial system has become increasingly perfect. After the virtual asset trading platform licensing system came into effect on June 1, 2023, it greatly enhanced the confidence of global investors in Hong Kong's virtual asset market. With clearer regulatory guidelines, it will bring new opportunities to the brokerage and asset management industries engaged in virtual asset trading, and also provide more protection for retail investors. In addition, in recent years, the SAR government has introduced various regulatory measures involving anti-money laundering, licensing and prevention of hackers. It has taken the initiative to assume the responsibility of promoting market standardization and exploring relevant policy formulation solutions. This shows Hong Kong's determination to develop the virtual asset market.
Platforms must be licensed to protect investment
In fact, the industry generally believes that Hong Kong has achieved remarkable results in the virtual asset market in recent years. In addition to having clearer regulatory guidelines to attract a large number of talents and investors, Hong Kong is also very active in developing tokenized securities and stablecoins. For example, last year, the HKMA successfully launched 800 million yuan of tokenized green bonds and established a stablecoin issuer sandbox, which was warmly supported by the industry. Moreover, with the cooperation of the Hong Kong Stock Exchange and the Securities and Futures Commission, new products are constantly being launched in the market. In April this year, the first batch of virtual asset spot ETFs were officially listed. Due to the positive attitude of the SAR government, many institutions also hope to develop in Hong Kong, and at the same time, talents and investors are more confident in Hong Kong's prospects. This is also the biggest achievement of Hong Kong in the development of the virtual asset market in recent years.
Just like the Fintech Week held last year, Coinbase co-founder and CEO Brian Armstrong also participated via video and said that Hong Kong has done a good job in regulating the virtual asset sector. The Hong Kong Securities and Futures Commission and the Hong Kong Monetary Authority provide clear supervision, allowing banks to strengthen cooperation with the virtual asset sector. He also pointed out that the United States needs to make improvements.
