LCQ14: Innovation and Technology Fund

To encourage and assist Hong Kong enterprises in upgrading their innovation and technological level, the Government has set up funding schemes under the Innovation and Technology Fund (ITF) to finance research and development (R&D) projects on innovation and technology.

Besides, enterprises may claim enhanced tax deduction for the expenditures incurred on qualifying R&D activities which they have engaged Designated Local Research Institutions to undertake: a 300 per cent tax deduction being granted for the first $2 million of the aggregate amount of expenditures, and 200 per cent for the remaining amount. Quite a number of Hong Kong businessmen hope that the Government will review and enhance the vetting and approval mechanism of the aforesaid funding schemes, and relax the eligibility criteria for applying for funding and claiming enhanced tax deduction, so that more R&D activities undertaken outside Hong Kong may benefit.