In Hong Kong dollars
Narrowed deficit compared to the original Government estimate
KPMG's proposed new measures for 2026-2027 Budget
Capitalise on the National 15th Five-Year Plan and strengthen Hong Kong as an international financial, shipping, trade and innovation and technology centre
- Attract more family offices to set up in Hong Kong – enhance the existing tax incentive regime for family offices, expanding their eligible investment scope to include digital assets and precious metals, to be attractive and effective
- Promote family offices to manage assets in Hong Kong - provide stamp duty exemption for asset transfers from high net worth individuals to their family-owned investment holding vehicles
- Support key industries – Revisit existing tax incentives for corporate treasury centre, aircraft / ship leasing and maritime services to ensure Hong Kong enterprises enjoying such tax incentives will remain competitive under BEPS 2.0 Pillar 2
- Encourage innovation and R&D activities – Expand the coverage of R&D tax deduction to include R&D activities outsourced to a Hong Kong company and performed in Hong Kong to encourage R&D activities
Strengthen Hong Kong's role as a “super connector” and attract multinational corporations and Chinese Mainland companies expanding overseas
- Reduce the costs of financing – revisit the existing stringent interest expense deduction rules to be more competitive compared to other jurisdictions
- Align with international practices – Consider introducing a withholding tax on interest income paid by non-financial institutions to non-Hong Kong residents to align with global tax standards
- Market Hong Kong as the ideal base for regional headquarters – Provide substance-based tax incentive (for example, an 8.25% preferential tax rate) for qualified profits derived from regional headquarters in Hong Kong to enhance Hong Kong's competitiveness in the Asia-Pacific region and attract foreign investment and create local job opportunities
- Enhance global competitiveness and attract multinational corporations – Revisit the tax relief available for overseas tax paid in jurisdictions with and without a double tax treaty with Hong Kong
- Promote the development of NM – Provide special policy package to the key enterprises located in NM, including but not limited to tax incentives and talent matching to promote comprehensive development
- Encourage fixed asset investment in NM – Provide accelerated tax depreciation for fixed assets located and used in NM
- Flexibly adopt public-private partnership approaches – Explore public-private partnership approaches such as joint ventures, build-operate-transfer to leverage combined expertise and share risks and costs in the development of NM
- Develop emerging industries – Develop a cross-border drone logistic network: Select pilot routes and areas to establish a cross-border low-altitude logistics network for creating new business opportunities and high-value jobs for the logistics industry
- Provide certainty and clarity on taxation of virtual assets market – Work with the industry players and tax profession to modernise the tax rules and provide greater clarity / certainty on taxation of virtual assets
- Support the development of virtual assets market – The Hong Kong SAR Government to identify suitable real world assets (RWA) (e.g. public infrastructure, commodities) and undertake a pilot RWA tokenisation project in Hong Kong
- Provide tax incentives – Introduce a general tax deduction for expenditure incurred on acquisition of intangible assets and allow a tax deduction where the intangible asset is acquired from related parties
- Foster talent and expertise – attract talents to Hong Kong to provide IP related professional services, and cultivate local expertise in IP management
- Ease the caretaking burden of working families – Provide working parents with an allowance of HK$60,000 who look after children aged 16 or below or disabled dependents through grandparents, or who employ domestic helpers through recognised institutions
- Address changing demographics and reduce financial burden of working families – Extend dependent parent and dependent grandparent allowances to eligible Hong Kong elderly who reside in the GBA
- Keep pace with the times – Adjust Salaries Tax rate bands and allowances with reference to consumer price index
- Support homebuyers – Increase the basic deduction for home loan interest from HK$100,000 to HK$120,000 per year of assessment
- Encourage charitable activities – Expanding the current tax rules regarding the deductibility of charitable donations to non-cash donation (e.g. donation of food)
- Relief for citizens and business – 100% Tax rebate capped at HK$6,000 for Profits Tax, Salaries Tax and tax under Personal Assessment
- Enhance competitiveness – Increase the cap of the Continuing Education Fund from HK$25,000 to HK$30,000, providing support for professional development and retraining for employees
- Allow the use of MPF for first home purchases – Under certain conditions, allow the use of part of MPF as a down payment for purchasing first home, providing more options for home purchase and retirement financial planning
