Hong Kong: Tax deduction for spectrum utilization fees for telecommunication industry
Legislation introducing a new tax deduction for spectrum utilization fees was gazetted and became effective on 19 January 2024.
Tax deduction for spectrum utilization fees for telecommunication industry
Legislation introducing a new tax deduction for spectrum utilization fees (SUFs) was gazetted and became effective on 19 January 2024.
The legislation provides a tax deduction for capital expenditures incurred as SUFs by mobile network operators in respect of radio spectrum auctions conducted on or after 19 January 2024. However, SUFs paid or to be paid for auctions held before 19 January 2024 will continue to be non-deductible. Read TaxNewsFlash
The deduction for the SUFs will generally be spread evenly over the spectrum assignment term (i.e., 15 years in general) in both cases of one-off lump sum payment and payment by installments. However, if a taxpayer starts to use the spectrum in a year of assessment (YOA) after the “assignment year of assessment” (i.e., the YOA in which the assignment term begins), the deduction period will start from the YOA in which the taxpayer first uses the spectrum.
For more information, contact a KPMG tax professional:
David Ling | davidxling@kpmg.com
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