2025-26 Budget and Tax Measures

The Hong Kong 2025-26 Budget aims to revitalize the city by addressing the HK$87.2 billion deficit projected for 2024-25. With a strong emphasis on fiscal responsibility, the government is committed to carefully managing finances while introducing bold measures to attract global talent and investment. By solidifying Hong Kong’s position as a world-leading hub for finance and innovation, these initiatives and reforms demonstrate a clear vision to make Hong Kong thrive once again on the global stage. Below is a summary of key initiatives and tax measures for the year 2025 – 2026.

Profits (Corporate) Tax

1. Corporate Tax rate for the first HK$2 million of profits is reduced to 8.25%.
2. Corporate Tax rate on remaining profits is 16.5%.
3. Offshore profit is not taxable by Hong Kong authority.
4. Hong Kong has no capital gain tax and no withholding tax on payment.
5. There is no tax on dividend.
6. Business Registration licence fee is HK$2200 for financial year 2025/26.
7. One-off reduction of profits tax subject to a ceiling of HK$1500 per case.
8. New Capital Investment Entrant Scheme (new CIES) will invite applications from eligible investors with at least HKD 30 million in qualifying assets and place HKD 2 million into a new CIES Investment Portfolio. Applicants may apply to reside in and pursue development in Hong Kong.

Salaries (Personal) Tax

The progressive tax rate for salary income remains as below for the financial year 2025/26.

The Financial Secretary has waived 100% tax deduction for salaries tax for the year 2024/25, subject to a ceiling of HK$1,500 per case.

Standard Rate

* Until superseded

Other Key Proposals

The Hong Kong Government is introducing measures to position the city as the most business-friendly destination, simplifying the process of registering and operating a business. These initiatives are designed to attract global investments and visionary entrepreneurs, reinforcing Hong Kong’s status as a vibrant hub for innovation, commerce, and opportunity.

• Invest HK$1 billion to set up the Hong Kong AI Research and Development Institute, aiming to boost Hong Kong’s position in tech innovation.
• Provide HK$1.23 billion to the Hong Kong Tourism Board to improve tourism, enhance visitor experiences, and attract high-spending overnight tourists.
• Invest over HK$210 million in a port community system to improve data sharing and strengthen Hong Kong as a global shipping hub.
• Launch a HK$300 million subsidy in mid-2025 for installing fast EV chargers citywide, promoting green transport. The InnoCentre in Kowloon Tong will become a GreenTech Hub for over 200 green tech companies to drive innovation.
• Launch a HK$100 million scheme to support manufacturing upgrades, offering up to HK$250,000 per company on a 1:2 matching basis to enhance industrial productivity and competitiveness.
• Support 30+ cultural intellectual property projects over five years with matching funds. In 2025, the second Hong Kong Performing Arts Expo will be held to boost cultural industries.
• Provide matching funds to help universities establish a third medical school, promoting medical education and healthcare innovation.
• Increase spending on projects like the Northern Metropolis and add refreshment stalls at major harbourfront sites in 2025. A study is also being done to turn the Hung Hom waterfront into a new landmark.
• Invest in the Low-Altitude Economy Regulatory Sandbox to develop low-altitude flying activities.

Should you have any questions, feel free to contact our licenced CPA and Chartered secretary at info@getstarted.hk.