Hong Kong's Financial Secretary Paul Chan has unveiled the 2026-27 Budget, combining one-off tax relief for businesses and individuals with structural reforms to cement the city's status as a global financial and innovation hub. Key measures include a 100% profits and salaries tax reduction capped at HKD 3,000, a global minimum tax for large multinationals from 2027-28, and new incentives spanning asset management, REITs, and intellectual property.
Hong Kong’s Financial Secretary Paul MP Chan delivered the 2026-27 Budget on 25 February 2026. Under the theme of “Driving High-quality, Inclusive Growth with Innovation and Finance,” the budget introduces a mix of one-off relief measures and long-term structural tax changes designed to maintain competitiveness while addressing the needs of residents and enterprises.
A significant portion of the text focuses on the “AI+” initiative, which aims to integrate artificial intelligence across public services and industrial sectors like life and health technology. To bolster its status as a global hub, the government plans major investments in the Northern Metropolis, the Hetao Hong Kong Park, and specialised industries such as low-altitude economy and aerospace.
The key tax measures are as follows:
Corporate tax
Hong Kong is moving forward with international tax reforms while providing short-term support for its business community. Businesses will receive a 100% reduction in profits tax for the 2025-26 year of assessment, also subject to a HKD 3,000 cap. This is projected to benefit roughly 171,000 businesses.
Implementing the global minimum tax
To align with OECD standards, the government confirmed that it will implement the global minimum tax and the Hong Kong minimum top-up tax for large multinational enterprise groups. Starting from 2027-28, groups with an annual consolidated revenue of EUR 750 million or above will be subject to this regime, which is expected to generate approximately HKD 15 billion in annual revenue.
Asset management
The tax concession regime for funds will be expanded to cover digital assets, precious metals, and specified commodities as qualifying investments, taking effect from the 2025-26 assessment year.
Maritime and aviation
Eligible commodities traders will benefit from a half-rate tax concession aimed at encouraging high value-added maritime services. The government will also review and enhance tax arrangements for research and development expenditures and intellectual property capital outlays.
Corporate treasury centres (CTCs)
New incentives and a pre-approval mechanism for Corporate Treasury Centres are expected to be announced in mid-2026.
Ad valorem stamp duty for high-value residential properties
The government has raised the Ad Valorem Stamp Duty on residential properties valued above HKD 100 million from 4.25% to 6.5%, effective retrospectively from 26 February 2026.
Property tax rates and internal restructuring
To ease the burden on property owners, rate concessions will be provided for both domestic and non-domestic properties for the first two quarters of 2026-27, capped at HKD 500 per quarter. Furthermore, to facilitate corporate restructuring, the criteria for stamp duty relief on intra-group transfers of assets will be relaxed, with an amendment bill expected within the year.
Environmental tax measures
The First Registration Tax (FRT) waiver for electric commercial vehicles and motorcycles has been extended to 31 March 2028. However, the FRT concession for electric private cars will not be renewed after 31 March 2026 due to market maturity.
REIT market development
Hong Kong will promote the growth of its Real Estate Investment Trust sector by introducing a stamp duty waiver for transferring non-residential properties into REITs that are seeking a stock exchange listing.
Intra-group asset transfer relief
The government will relax eligibility criteria for stamp duty relief on intra-group asset transfers, making it easier for enterprises to restructure their internal operations without facing significant tax burdens.
Crypto-asset and international reporting standards
The Inland Revenue Ordinance will be amended over the next two years to implement the Crypto-Asset Reporting Framework and the updated Common Reporting Standard addendum, aligning Hong Kong with international tax transparency requirements.
Preferential enterprise attraction packages
New policy packages will target specific types of enterprises, offering highly competitive preferential tax rates set at either half the standard rate or a flat 5% rate to attract strategic businesses.
Intellectual property tax framework
The tax regime for intellectual property will be refined with new deduction arrangements allowing businesses to claim tax deductions on capital expenditure for purchasing IP rights or usage rights.
Gold trading incentives
Authorities will explore introducing tax incentives for eligible financial institutions that conduct gold trading and settlement operations in Hong Kong, aiming to strengthen the city’s precious metals market.
Personal tax relief
For the general public, the primary highlight is a 100% reduction in salaries tax and tax under personal assessment for the 2025/26 year of assessment, capped at HKD 3,000. This one-off measure is expected to benefit approximately 2.12 million taxpayers.
