Hong Kong 2025/26 Budget - 10 Key (Tax) Takeaways

As you probably know, the Hong Kong Government has released its 2025-2026 Budget, prioritizing economic recovery, global competitiveness, and improvement of livelihood. Despite an expected and modest deficit, Hong Kong’s economy grew by 2.5 % in 2024, driven by stable employment, moderate inflation and mainland China’s growing economy.

The Government remains optimistic about Hong Kong’s future, explicitly ruling out the introduction of a Value-Added Tax (VAT) or Goods and Services Tax (GST) within the foreseeable future. This notable decision underscores its commitment to maintaining Hong Kong’s attractiveness as a global business hub.

In our opinion, there are no major changes announced but, nonetheless, we summarize 10 key tax measures which are potentially relevant for your business or yourself:

For companies and investors:

• Funds, single family offices and carried interest: enhancement of preferential tax regimes, including expansion of the scope of funds, the types of qualifying transactions and the tax concession for carried interest distributions by private equity funds;

• Intellectual property (IP): review of tax deductions for IP-related expenditure, including lump-sum licensing fees and purchases of IP or rights to use IP from associates;

• Maritime & green shipping:

  - tax deduction for ship acquisition costs under operating leases;

  - tax exemption for green methanol used in ship bunkering; and

  - a half-rate tax concession for eligible commodity traders;

• Profits tax: a 100% reduction for the year of assessment 2024/25, capped at HK$1,500;

• Rates concession: capped at HK$500 per non-residential property for the 1st quarter of 2025/26;

• Global minimum tax: a 15% effective tax rate for multinationals of which the annual revenue ≥ EUR 750 million (approx. HK$6.8 billion), in line with the international tax landscape.

For individuals:

• Salaries tax and personal assessment: a 100% reduction for the year of assessment 2024/25, subject to a ceiling of HK$1,500;

• Stamp duty relief: an increase of the maximum value of properties chargeable to a stamp duty of HK$100 from HK$3 million to HK$4 million (with effect from 26 February 2025);

• Rates concession: capped at HK$500 per residential property for the 1st quarter of 2025/26;

• Air passenger departure tax: an adjustment from HK$120 to HK$200 per passenger (with effect from 1 October 2025).

If you have any queries on how the Budget may affect you or your business, please contact us on info@kyimtax.com.