The Financial Secretary, Mr. Paul Chan Mo-po, delivered the 2025-26 Budget Speech on 26 February 2025. This year's budget includes several significant tax measures aimed at providing relief to individuals and businesses, as well as enhancing Hong Kong's position as a major international financial center. Here are the key highlights:

Tax Relief for Individuals and Businesses

The 2025 budget proposal includes a range of tax relief measures designed to support both individuals and businesses:

• One-off Tax Reduction: For the year of assessment 2024/25, there will be a one-off 100% tax reduction for salaries tax, tax under personal assessment, and profits tax, subject to a cap of HKD 1,500
• This measure is expected to benefit a wide range of taxpayers, providing much-needed relief.
• Rates Waiver: A rates waiver for each domestic rateable property and a rates concession for each non-domestic rateable property will be provided for the first quarter of 2025/26, subject to a ceiling of HKD 500 each

Adjustments to Stamp Duty

The budget also proposes adjustments to stamp duty rates to support the property market:

• Stamp Duty on Property Transactions: The ad valorem stamp-duty rate for residential and non-residential property transactions has been adjusted. Notably, the maximum value of properties chargeable to an HKD 100 stamp duty has been raised from HKD 3 million to HKD 4 million

Introduction of Global Minimum Tax

To align with international tax standards, the budget includes the introduction of a global minimum tax:

• Global Minimum Tax: A bill on the implementation of the Global Minimum Tax proposal (15%) under the OECD framework for multinational enterprise groups with a consolidated annual revenue of at least EUR 750 million was submitted to the Legislative Council in January 2025

Other Notable Tax Measures

Additional tax measures proposed in the budget include:

• Increase in Air Passenger Departure Tax: The rate of air passenger departure tax will be increased from HKD 120 to HKD 200 per passenger starting from the third quarter of 2025/26
• Preferential Tax Regimes: New proposals regarding preferential tax regimes for funds, single family offices, and carried interests will be formulated to strengthen Hong Kong’s position as a major international financial center

The budget proposals will need approval by the Legislative Council before taking effect.

For more information, please contact Ms. Amie Cheung at amie.cheung@lccpa.com.hk