Hong Kong Updates- Employment

Employment

The long-running Cathay Pacific case has finally reached and been decided on by the Court of Final Appeal (CFA).There are two parts to the decision – firstly, clarification of the formula for calculating statutory holiday and annual leave pay under the old (preamendment) Employment Ordinance (EO). But, more importantly, the question was decided of which leave days are included in the calculation according to the statutory formula where payment is made in lieu of the leave being taken.

This affects a large proportion of employers, as the EO prescribes only 7 days’ annual leave and many employers (particularly employers which are foreign-owned) grant more than 7 days annual leave to their employees.

Hong Kong Updates- Stamp Duty

Stamp Duty

The big news in October, at least for Hong Kong residents, was the increase in Buyer’s Stamp Duty (BSD) for non-Hong Kong Permanent Residents, designed to reduce distortions (or to introduce one, depending on your point of view) in the Hong Kong property market and to ease the pressure on the price of accommodation for permanent residents. The BSD is 15% of the price (or value, whichever is higher) and, unlike the existing stamp duty, payable jointly and severally by buyer and seller, is payable by the buyer only.

A number of questions have come up about ways to avoid the BSD, but the government’s immediate response to one such suggestion – to move a property to a subsidiary and for the shares in the subsidiary then to be sold – elicited a swift and clear response that that scheme at least would escape BSD.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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