Hong Kong expands tax deduction for expenditures associated with purchase of IP rights

The Hong Kong government announced that more generous tax rules providing deductions for capital expenditures associated with the purchase of intellectual property (IP) rights entered into effect on June 29.

Hong Kong seeks to become an IP trading hub in the Asia-Pacific region, said a spokesman for the Commerce and Economic Development Bureau.

Prior law provided tax deductions for expenditures incurred for patents, know-how, copyright, registered designs, and registered trademarks. The new law expands these benefits, permitting deductions for payments associated with rights in layout design (topography) of integrated circuits, plant varieties, and performances, the government said.

Also, whereas prior law allowed tax deductions for registration expenses for trademarks, designs, and patents, the new law also covers plant variety rights.