According to Sections 16E and 16(1)(g) of the Inland Revenue Ordinance (Cap 112), the acquisition cost of capital or registration cost of patent, trademark or design may be used as deduction of Profits Tax.
As Hong Kong pursues a low tax rates system, it attracts a large number of overseas investors to register intellectual property rights in Hong Kong in order to achieve the tax efficient outcome.
Intellectual Property is clearly defined in the Inland Revenue Ordinance (Chapter 112):
● Patents: Section 16E(4) of the Inland Revenue Ordinance
● Registered Trademarks: Section 16EA(11) of the Inland Revenue Ordinance
● Registered Designs: Sections 16EA, 16EB and 16EC of the Inland Revenue Ordinance
Includes all government fees, service fees and agency fees
Trademarks are symbols used by a company to distinguish their goods or services from others’ in the market.
There are two corporate symbols often used for this purpose namely ® and TM with each referring to a different meaning. ® refers to a trademark registered and, therefore, protected under trademark laws while TM refers to a trademark not yet registered or protected under trademark laws.
The trademark symbols can be of any forms including unique brands, letters, numerals, words, names, logos, signatures, shapes, colors, labels, tickets, aspects of packaging and a combination of these in relation to certain protected goods or services.
Registering your trademarks is important especially for long-term benefits and if you plan on taking your business into a bigger scale. Below are benefits you obtain by registering your trademark:
1. Quality Assurance
The use of trademark implies quality assurance to your clients or customers. It silently delivers a message to them that you take your business seriously and into a professional level and for all that, you are proud of it and everything you have invested in it.
2. Legal Rights
Trademark allows better control and protection over your goods and services. If the rights upon the trademark are claimed by two or more parties, you possess absolute rights to win the case and to go to court to rectify any imitation and/ or infringement of your brand or good name.
As your business grows; problems related to legal matters are prone to arise including the use of your goods and services by authorized parties that take benefits economically from it. Trademark can prevent this from happening and, if it does occur, you can file this to the court for seeking out protection and compensations.
4. International Legal Protection
Trademark you register in Hong Kong will have legal protection in some countries that are signatories to the Nice Convention or through the Madrid Protocol System. So, your position in international legal protection over your trademark is strong enough to play in the global trading market.