HONG KONG – Budget 2025-26: Strategic Tax Measures for Business Growth and Innovation

Published On - 11 March, 2025

Valentin Moriceau Hong Kong

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

 

 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

 

 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.