That said, unlike some other financial centres, the tax regime has yet to make provisions that are customized for CTC activities. 20. Underscoring the Government’s determination to promote Hong Kong as a CTC hub, and having considered the study’s recommendations, the Financial Secretary in his latest budget speech announced two tax measures that will make Hong Kong’s tax regime even more attractive for MNCs to set up CTCs in Hong Kong. 21. First, the interest deduction rules under the Inland Revenue Ordinance will be amended such that interest expense arising from genuine inter-company borrowing and lending will be deductible. This will resolve the “tax asymmetry” issue currently perceived by some MNCs as an impediment to their establishing or expanding CTC operations in Hong Kong. 22. Second, profits derived from qualifying activities of eligible CTCs will benefit from a half-rate concession. In other words, the applicable tax rate will be reduced from the current 16.5% to 8.25%. We will define the scope of qualifying activities in consultation with the industry later this year. But broadly speaking, the scope will encompass corporate finance, liquidity management and risk management activities typically conducted by CTCs for their overseas associated companies. 23. The HKMA is working closely with the Government to take forward the legislative work with a view to introducing the relevant bill to the Legislative Council in the 2015–16 legislative session. 24.
The idea is to mobilise all employees, in order to bring out the innovations that are most suited to our missions and then have them implemented by “intrapreneurs", who are bestowed with great autonomy, comparable to that of start uppers, for the development of their project. Our first intrapreneurship programme will enable us, I hope, to benefit within 9 months to a year from artificial intelligence tools to conduct our supervisory missions. All of these initiatives are as vital as they are exciting. They are the DNA of our institutions, and I am convinced, the reflection of that of the French and European ecosystem. Thank you for your attention. 4/4  BIS central bankers' speeches