Revised tax guidelines will have little impact on charities

Mr. Xavier Chan, the Founder and Managing Partner of CWK Global, explained the recent tax guideline amendments for charities and its impact on “Bastille Post”.

Charities in Hong Kong are actually tax-exempt organizations under the IRD registration system, but the legislature has not yet established the “Charities Commission”, which means that charities still lack guidance on compliance, due diligence and best practices. 

In response to the Hong Kong National Security Law, the Inland Revenue Department (IRD) has amended the tax guidelines for charities (Section 88 of the IRO) to exclude charities from registration or recognition as tax-exempt charities if they are involved in acts that endanger national security. The authorities have clarified the content of the tax guidelines to achieve the goal of preventing and stopping acts that endanger national security under the Hong Kong National Security Law.

The amendment only clarifies the difference between political organizations and charitable organizations. If the organization is engaged in political activities, it will not be considered a charitable organization, but in fact, the IRD has not granted tax-exempt status to political organizations in the past, so it is not expected that the difficulty of applying for charitable organizations will increase.

For more details, please read the article (only available in Chinese).