On February 26, 2025, Hong Kong’s Financial Secretary, Paul Chan, unveiled the government budget for the fiscal year 2025-26. The budget includes several tax measures aimed at strengthening fiscal stability while maintaining Hong Kong’s status as a low-tax, business-friendly environment:
General tax incentives | |
Profits Tax
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A 100% reduction in profits tax for the 2024/25 tax year, capped at HK$1,500 per case. |
Salaries Tax | · A 100% reduction in salaries tax for the 2024/25 tax year, capped at HK$1,500 per individual.
· For married couples filing jointly, the cap remains at HK$1,500 combined. |
Property Transaction Incentives | · The exemption threshold for stamp duty of HK$100 has been raised for both residential and non-residential property transactions.
· Properties valued at HK$4 million or below are eligible for this exemption, effective immediately. |
Tax Relief for Combined Liabilities | Taxpayers liable for both salaries tax and profits tax will receive the proposed tax relief on both, calculated based on their specific income and profit assessments. |
Beyond general tax relief, the Budget 2025-26 includes targeted incentives to stimulate growth and innovation in strategic sectors, aiming to attract both domestic and international investment.
Specific tax measures to support key industries | |
Innovation and Technology
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The government will review and potentially enhance tax deductions for the purchase of IP rights and related transactions, supporting technological advancements and research. |
Financial Sector | Plans are in place to optimize tax incentives for funds and single-family offices, ensuring Hong Kong remains an attractive hub for financial services. |
Shipping Sector | Hong Kong will introduce a tax deduction on ship acquisition costs for ship lessors under an operating lease and propose a half-rate (8.25%) to eligible commodity traders. A bill will be presented to the legislature in the first half of 2026. |
If you require more information about the Budget Policy 2025/26 of the Hong Kong Government or if you have other tax issues in the region, please do not hesitate to contact us at contact@orbis-alliance.com.