Hong Kong passes new tax regime for aircraft; US enacts new security protocols for airlines

Eleanor Steed
By Eleanor Steed June 29, 2017 14:17

Hong Kong passes new tax regime for aircraft; US enacts new security protocols for airlines

After its third reading, the Hong Kong Legislative Council passed the “Inland Revenue (Amendment) (No. 2) Bill 2017” yesterday (June 28, 2017), which includes reductions in profits tax for aircraft leasing companies. The amendment ordinance will soon by gazetted and will take effect shortly.

CALC was the first lessor out of the block to commend the decision. CEO Mike Poon described the passing of the bull as “an important first step towards establishing Hong Kong as an international aircraft leasing hub and aviation financing hub”. Poon expects the new tax regime to support the development of Hong Kong’s aircraft leasing industry and attract international lessors and leasing-related businesses to Hong Kong.

“We hope to play a role in facilitating Hong Kong to become an international aircraft leasing hub,” he adds. “The passage of the new tax regime is a reflection of the joint efforts of the industry and the government. Apart from the existing Dublin, Tianjin and Shanghai platforms, CALC will consider extending its leasing platforms to Hong Kong.”

The new tax regime will leverage Hong Kong’s financial infrastructure and should help to attract more aviation industries to the city state. CALC’s believes that the revision of the tax code, will allow the Hong Kong government to emulate and catch up with Singapore and other aircraft leasing hubs.

Meanwhile, the US has enacted new security protocols effective from today. Yesterday, (June 28) the US Secretary of Homeland Security John Kelly announced the enhanced security screening measures for all commercial flights to the United States.

The enhanced security measures include: enhancing overall passenger screening; conducting heightened screening of personal electronic devices; increasing security protocols around aircraft and in passenger areas; and deploying advanced technology, expanding canine screening, and establishing additional preclearance locations.

In March, the DHS banned electronic devices larger than a cell phone from the passenger cabins of U.S.-bound commercial flights from ten airports in the Middle East and North Africa. The Trump Administration has stepped in to remove this requirement for all commercial airlines, however.

The enhanced security measures will affect 325,000 passengers flying into the US every day, and impact 180 airlines and 280 airports. Airlines that fail to comply or are slow to adopt them risk being fined, barred from entry to the US, or banned from carrying laptops in any part of inbound planes. The US DHS plans to encourage more airports to become preclearance locations to help enhance security and increase convenience by allowing international travellers to go through customs and border security screening before boarding their flights to the United States.

Eleanor Steed
By Eleanor Steed June 29, 2017 14:17