Hong Kong Financial Secretary Paul Chan delivered the 2025-26 budget on 26 February 2025, which included various tax measures such as reducing profits tax, salaries tax and tax under personal assessment; raising the maximum value of properties chargeable to a stamp duty of HKD 100; amongst others.
The key tax measures proposed are:
Reducing profits tax, salaries tax and tax under personal assessment for the year of assessment 2024-25
The Financial Secretary proposed a one-off reduction of profits tax, salaries tax and tax under personal assessment for the year of assessment 2024/25 by 100%, subject to a ceiling of HKD 1,500 per case. For profits tax, the ceiling of the proposed tax reduction is applied to each business.
Raising the maximum value of properties chargeable to a stamp duty of HKD 100
The Financial Secretary proposed to raise the maximum value of properties chargeable to a stamp duty of HKD 100 to HKD 4 million, effective from 26 February 2025. The Government will introduce the Stamp Duty (Amendment) Bill 2025 (the Bill) into the Legislative Council to implement the proposal. Pursuant to the Order, the new value bands will be applicable to any instrument for residential or non-residential property transactions executed on or after 26 February 2025.
Enhancing tax deductions to boost IP-driven industries and trading in Hong Kong
The Hong Kong government will review the relevant tax deduction arrangements for various expenditures, including the lump sum licensing fees for acquiring the rights to use IP and related expenses incurred on the purchasing IP or the rights to use IP from associates. This will accelerate the development of IP-intensive industries and promote the development of IP trading in Hong Kong.
Government to propose tax breaks for funds and family offices
The government will formulate proposals on the preferential tax regimes for funds, single family offices and carried interest this year, including expanding the scope of “fund” under the tax exemption regime, increasing the types of qualifying transactions eligible for tax concessions for funds and single family offices, enhancing the tax concession arrangement on the distribution of carried interest by private equity funds, etc.
Legislation for global minimum tax on multinationals awaits approval
The Financial Secretary highlighted that the legislation to implement the global minimum tax on large multinational enterprises is currently awaiting approval from the Legislative Council (LegCo), which the Hong Kong government submitted in January 2025. The legislation aims to apply the global minimum tax rate of 15% on large multinational enterprise groups with an annual consolidated group revenue of at least EUR 750 million and impose the Hong Kong minimum top-up tax.
New tax incentives to boost maritime industry growth
The government has introduced tax measures conducive to developing the maritime sector. It enhances these measures, including tax deductions on ship acquisition costs for ship lessors under an operating lease and providing half-rate tax concessions to eligible commodity traders.
Hong Kong expands global ties with new investment and tax agreements
Hong Kong is actively pursuing investment agreements with Peru, Saudi Arabia, Egypt, and Bangladesh, while also engaging in tax treaty negotiations with 17 other countries.
