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Hong Kong: Direct and indirect tax proposals in 2024-2025 budget

The Financial Secretary delivered the 2024-2025 budget that included tax-related proposals.

February 29, 2024

The Financial Secretary on 28 February 2024 delivered the 2024-2025 budget that included the following tax-related proposals:

Profits tax

  • No proposed changes to tax rates
  • Reduction of 100% in profits tax payable for 2023-2024, subject to a ceiling of HKD 3,000
  • Profits tax deduction for expenses incurred in reinstating the condition of the leased premises to their original condition
  • Commencement of study on enhancements to tax concession measures for maritime industry
  • Introduction of legislative proposal to implement “patent box” tax incentive
  • Reduction of profits tax rate to 5% for profits derived from qualifying intangible property (IP)
  • Removal of time limit for claiming allowances for industrial buildings, commercial buildings and structures
  • Enhancement of preferential tax regimes for funds and family offices

Salaries tax

  • Implementation of two‑tiered standard rates regime for salaries tax and tax under personal assessment starting from the year of assessment 2024-2025
  • Reduction of 100% in salaries tax payable for 2023-2024, subject to a ceiling of HKD3,000

Other taxes

  • Hotel accommodation tax: Increase from 0% to 3% starting from 1 January 2025
  • Rating system: Introduction of progressive rating system for domestic properties in the fourth quarter of 2024-2025
  • Stamp duty: Repeal of special stamp duty, buyer’s stamp duty or new residential stamp duty for any residential property transactions starting from 28 February 2024
  • Property tax: No proposed changes
  • Rates (domestic property): Rates waiver for each domestic property for the first quarter of 2024-2025, subject to a ceiling of HKD 1,000 for each rateable property 
  • Rates (non-domestic property): Rates concession for each non-domestic property for the first quarter of 2024-2025, subject to a ceiling of HKD 1,000 for each rateable property

For more information, contact a KPMG tax professional:

David Ling | davidxling@kpmg.com

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