ABSTRACT
Hong Kong is often referred to as the last bastion of laissez-faire. 1 The pronounced policy of its government is one of "positive nonintervention." Tax rates are kept low and tax structures, simple. However, this general impression is very misleading and "the truth is that it [the government] acts and intervenes a great deal." 2 In the case of corporation profits tax, there are provisions in the tax laws that have nonneutral effects on investment decisions. The purpose of this chapter is to examine these provisions by making some estimates of effective corporate tax rates on certain types of capital income.
