On 26 February 2025, the Financial Secretary unveiled the 2025/26 Hong Kong Budget, outlining a variety of long-term strategies and short-term relief measures aimed at stabilising the economy, supporting businesses, and promoting innovation.
Below is a summary of the key tax-related proposals included in this year’s budget.
One-Off Tax Reduction for Individuals and Corporates
For the year of assessment 2024/25, a one-off 100% reduction in salaries tax, tax under personal assessment, and profits tax has been proposed. This relief is subject to a cap of HKD 1,500 per taxpayer.
For Salaries Tax and Tax Under Personal Assessment:
For Profits Tax:
Rates for Domestic and Non-Domestic Properties
A rates waiver for each domestic rateable property and a concession for non-domestic properties will be granted for the first quarter of 2025/26, both capped at HKD 500 per property.
Adjustments to Stamp Duty Rates
The ad valorem stamp duty applicable to residential and non-residential property transactions has been updated. Effective 26 February 2025, the value of properties eligible for a nominal HKD 100 stamp duty has increased from HKD 3 million to HKD 4 million.
Updated Stamp Duty Table:
Implementation of the Global Minimum Tax
A bill has been introduced to implement the 15% Global Minimum Tax under the OECD framework. This applies to multinational enterprise (MNE) groups with consolidated annual revenue of at least EUR 750 million. The initiative targets base erosion and profit shifting and aligns Hong Kong with global tax transparency efforts.
Increase in Air Passenger Departure Tax
Starting from the third quarter of 2025/26, the air passenger departure tax will increase from HKD 120 to HKD 200 per passenger.
Enhancing Preferential Tax Regimes
Hong Kong aims to reinforce its status as a financial hub with new enhancements to preferential tax regimes:
Expansion of the definition of “fund” under the existing exemption regime
Enhanced tax concession arrangements on carried interest distributions from private equity funds
New incentives for single family offices
Tax Incentives for the Maritime Industry
To keep up with evolving global tax standards, several new maritime-related tax measures have been proposed:
Tax deductions for ship acquisition costs for lessors under operating leases
Introduction of half-rate tax concessions for eligible commodity traders
Tax exemptions for green methanol used in bunkering, supporting the transition to sustainable shipping
Review of Tax Deduction Rules for Intellectual Property (IP)
To promote IP-intensive industries, the government will review the deduction arrangements for:
Lump sum licensing fees for IP rights
Expenses incurred in acquiring IP rights from associates
This is intended to bolster IP trading and innovation in Hong Kong.
Progress on Double Taxation Agreements
Negotiations are underway with 17 jurisdictions to establish new Comprehensive Avoidance of Double Taxation Agreements (CDTAs), with more developments expected within the year.
Legislative Outlook and Next Steps
The proposed changes signal Hong Kong’s commitment to aligning with global tax practices while offering targeted local relief. Legislative updates are expected throughout the year. Businesses and individuals are encouraged to remain informed and consult their advisors for tailored tax planning strategies.
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