The Hong Kong Government will gazette the Inland Revenue (Amendment) (Tax Concessions, Concessionary Deductions and Allowances) Bill 2026 on 6 March. The Bill introduces concessionary tax measures from the 2025 Policy Address and the 2026-27 Budget.

RF Report

The Hong Kong Government will gazette the Inland Revenue (Amendment) (Tax Concessions, Concessionary Deductions and Allowances) Bill 2026 on 6 March, introducing concessionary tax measures announced in the 2025 Policy Address and the 2026-27 Budget.

This announcement was made on 4 March 2026.

The Bill covers adjustments to salaries tax and tax under personal assessment, effective from the year of assessment 2026/27:

  • Basic and personal allowances: Basic allowance and single parent allowance rise from HKD 132,000 to HKD 145,000; married person’s allowance increases from HKD 264,000 to HKD 290,000.
  • Dependent parent/grandparent allowances: Increased from HKD 50,000 to HKD 55,000 for dependents aged 60 or above (or disabled), and from HKD 25,000 to HKD 27,500 for those aged 55–59.
  • Elderly residential care expenses: Deduction ceiling raised from HKD 100,000 to HKD 110,000 per eligible parent/grandparent.
  • Additional child allowance: The claim period for newborns extended from one year to two years.
  • Child allowance: Raised from HKD 130,000 to HKD 140,000, including additional child allowance for newborns.

The impact of these measures is significant:

Measure Beneficiaries Revenue Reduction
Basic and personal allowances 2.09 million taxpayers HKD 3.56 billion annually
Dependent parent/grandparent allowances and elderly care expenses 830,000 taxpayers HKD 970 million annually
Child allowances and extended claim period 360,000 taxpayers HKD 980 million annually

A measure on extended child allowance was proposed in the 2025 Policy Address, while the others were announced in the 2026-27 Budget.

The Bill also implements a one-off 100% reduction in salaries tax, tax under personal assessment, and profits tax for 2025/26, capped at HKD 3,000 per case. This reduction will affect about 2.12 million individual taxpayers and 170,800 corporations and unincorporated businesses, resulting in approximately HKD 5.78 billion in forgone revenue.

The Bill is scheduled for first reading and commencement of second reading debate in the Legislative Council on 18 March.