Hong Kong: Stamp duty, patent box, other tax-related proposals in 2023 Policy Address

Chief Executive delivered the 2023 Policy Address

Chief Executive delivered the 2023 Policy Address

The Chief Executive on 25 October 2023 delivered the 2023 Policy Address which included the following tax-related proposals:

Stamp duty

  • Reduce rate of stamp duty on Hong Kong stock transfer from 0.13% to 0.1% of the consideration or the market value (whichever is higher) of the stock transferred, payable by each of the buyer and seller
  • Shorten the applicable period of the Special Stamp Duty from 36 months to 24 months
  • Reduce rate of each of the Buyer’s Stamp Duty and the New Residential Stamp Duty from 15% to 7.5%
  • Introduce stamp duty suspension arrangement for certain overseas talents’ acquisition of residential properties in Hong Kong to replace the existing stamp duty “refund arrangement” 

Profits tax

  • Implement “patent box” tax incentive to reduce the profits tax rate for qualifying profits derived from patents and similar intellectual properties from 16.5% to 5% (legislative proposals to be introduced in the first half of 2024) (read TaxNewsFlash)
  • Introduce further tax deduction in the year of assessment 2024/2025 to encourage employers to make more mandatory provident fund voluntary contributions for their employees aged 65 or above (legislative proposals to be introduced in the first quarter of 2024)

Salaries tax

Starting from the year of assessment 2024/2025:

  • Raise the deduction ceiling for home loan interest or domestic rents from HK$100,000 to HK$120,000 per year for taxpayers who live with his/her first child born on 25 October 2023 or after, until the child reaches the age of 18
  • Introduce tax deduction for assisted reproductive services, subject to a ceiling of HK$100,000 per year

Other measures already announced

  • Introduce company re-domiciliation regime and proactively reaching out to major Hong Kong listed companies registered overseas to encourage relocation to Hong Kong (legislative proposals to be introduced in the first half of 2024) (read TaxNewsFlash)
  • Implement risk-based capital regime for the insurance industry in Hong Kong within 2024 (read TaxNewsFlash)

For more information, contact a KPMG tax professional:

David Ling | davidxling@kpmg.com



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