The 2026/27 Budget was announced on February 25, 2026 by the Financial Secretary, Mr Paul Chan Mo-po.

We set out below the principal tax-related measures that are expected to affect limited companies and individuals. The information is based on the Budget Speech and the supporting documents released:-

1. One-Off Tax Relief (Year of Assessment 2025/26)

• • Salaries Tax & Personal Assessment — 100% reduction, capped at HK$3,000 per taxpayer. (Benefiting ~2.12 million individuals; reflected in your final tax bills for YA 2025/26.)
  • Profits Tax — 100% reduction, capped at HK$3,000 per business. (Benefiting ~171,000 companies/corporations.)

These concessions will be reflected automatically in the relevant final tax assessments.

2. Salaries Tax Allowances – Increased from YA 2026/27 (Permanent)

• • Basic / Single Parent Allowance: HK$145,000 (from HK$132,000)
  • Married Person’s Allowance: HK$290,000 (from HK$264,000)
  • Child / Additional Child Allowance: HK$140,000 (from HK$130,000)
  • Dependent Parent / Grandparent (60+): HK$55,000 (from HK$50,000)
  • Dependent Parent / Grandparent (55–59): HK$27,500 (from HK$25,000)
  • Elderly Residential Care Expenses Ceiling: HK$110,000 (from HK$100,000)

3. Property-Related Relief & Duties

• • Rates Concession: HK$500 per quarter for the first two quarters of 2026/27, applicable to both domestic and non-domestic properties.
  • Stamp Duty on Residential Properties: The rate for transactions exceeding HK$100 million will be increased from 4.25% to 6.5%, effective 26 February 2026 (subject to passage by the Legislative Council).
  • Relaxed stamp duty rules will apply to certain intra-group asset transfers to facilitate corporate reorganizations. 

4. Corporate & Investment Tax Enhancements

• • Family Offices & Funds Regime — Expanded qualifying assets (digital assets, precious metals, private credit, loans, etc.), simplified compliance, and broadened scope to certain single-investor funds. Legislative amendments to be introduced in the first half of 2026 (effective from YA 2025/26 in many cases).
  • New Industries & AI Enterprises — Preferential tax packages (half-rate 8.25% or 5% profits tax in selected cases) together with land grants and subsidies.
  • R&D & Cross-Boundary Collaboration — Further enhancements expected, especially for Greater Bay Area projects.
  • Corporate Treasury Centres (CTCs) — Additional tax incentives and flexibility.
  • Global Minimum Tax / HK Top-Up Tax — Applies only to large multinational groups (consolidated revenue ≥ EUR 750 million). Expected to generate ~HK$15 billiona. from 2027/28. Most local limited companies are unaffected.

5. Other Business-Friendly Moves

• • New Advisory Committee on Tax Policy (chaired by the Financial Secretary) to keep Hong Kong’s simple, low-tax regime competitive.
  • SME Financing Guarantee Scheme extended and expanded.

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