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Taxation - Hong Kong

Question

Frequently Asked Questions about tax deduction for Environment-friendly Vehicles in Hong Kong

Answer
Q:
What types of environment-friendly vehicles are eligible for the tax deduction?
A: The eligible environment-friendly vehicles cover the following three categories:
1.
Eligible vehicles under the “Tax Incentives Scheme for Environment-friendly Commercial Vehicles” administered by the Environmental Protection Department;
2. Hybrid electric vehicles; and
3. Hybrid electric vehicles; and
The above-mentioned environment-friendly vehicles do not include any vehicle in which any person holds rights as a lessee under a lease.

Q:
What vehicle models are eligible under the “Tax Incentives Scheme for Environment-friendly Commercial Vehicles”?
A:
You may check eligible vehicle models by visiting the website of the Environmental Protection Department
http://www.epd.gov.hk/epd/english/environmentinhk/air/prob_solutions/environment_friendly_commercial_vehicles.html

Q:
Does the purchase of “second-hand” environment-friendly vehicles qualify for the tax deduction?
A:
Yes, buyers of second-hand vehicles are still entitled to the tax deduction as long as the vehicle is an eligible environment-friendly vehicle at the time of purchase.

Q:
When can I make a tax deduction for environment-friendly vehicle?
A:
Full deduction is allowed in the year of purchase.

Q:
Does the tax deduction only apply to eligible environment-friendly vehicles which is used for business?
A:
Yes, when an eligible environment-friendly vehicle is partly not used in the production of chargeable profits, the tax deduction shall be adjusted proportionately.

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