Hong Kong's famous Jumbo Floating Restaurant has sunk in the South China Sea after being towed away from the city.
The tourist attraction, which has struggled financially recently, capsized on Sunday near the Paracel Islands after it "encountered adverse conditions" and began to take on water, its parent company said.
It was announced last month that, ahead of its licence expiration in June, Jumbo would leave Hong Kong and await a new operator at an undisclosed location.
The company said it was "very saddened by the incident", in which no crew members were injured.
"The water depth at the scene is over 1,000 meters, making it extremely difficult to carry out salvage works," Aberdeen Restaurant Enterprises said on Monday.
Marine engineers had been hired to inspect the floating restaurant and install hoardings on the vessel before the trip and "all relevant approvals" had been obtained.
The restaurant closed in March 2020, with the Covid-19 pandemic the last in almost a decade of financial woes.
Operator Melco International Development said last month the business had not been profitable since 2013 and cumulative losses had exceeded HK$100 million ($12.7m).
It was still costing millions in maintenance fees every year, and around a dozen businesses and organisations had declined an invitation to take it over at no charge, Melco said.
The restaurant set off shortly before noon last Tuesday from the southern Hong Kong Island typhoon shelter, where it had sat for nearly half a century.
Opened in 1976 by the late casino tycoon Stanley Ho, in its glory days it embodied the height of luxury, reportedly costing more than HK$30m to build.
Designed like a Chinese imperial palace and once considered a must-see landmark, the restaurant drew visitors from Queen Elizabeth II to Tom Cruise.
It also featured in several films, including Steven Soderbergh's Contagion, about a deadly global pandemic.
Jumbo's departure from Hong Kong was met with regret and nostalgia from many Hong Kong residents.
Some online commentators described pictures of the floating palace sailing across a charcoal grey ocean towards the horizon as a metaphor for Hong Kong's future.
The city has seen harsh pandemic restrictions put its status as an international hub at risk, while a national security law imposed by Beijing has stifled dissent, remoulding Hong Kong in China's authoritarian image.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
