With the abolition of Business Tax and introduction of VAT, the law also classifies certain businesses which are not suitable to be under VAT system and therefore are subject to tax which is similar to Business Tax. This is called "Specific Business Tax" or "SBT" whereby municipal tax at the rate of 10% of such SBT continue to apply.

NOTE: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

If you would like further advice please contact: David Ellis, Johnson Stokes & Master, 16th Floor, Princes Building, 10 Chater Road, Hong Kong; Tel 2843 4226; Fax no. : 2845 9121. Alternatively do a text search "Johnson Stokes and Master" and "Business Monitor".