Hong Kong SAR

New legislation enacted

The following pieces of legislation were enacted in the past 12 months:

• The Inland Revenue (Amendment) (Tax Deductions for Leased Premises Reinstatement and Allowances for Buildings and Structures) Ordinance 2024 was gazetted on 27 December 2024 to give effect to two enhancement measures, namely (i) providing a new profits tax deduction for reinstatement costs for leased premises and (ii) removing the time limit for claiming annual allowances in respect of a commercial/industrial building or structure. These measures take effect from the year of assessment 2024/25.

• The Stamp Duty Legislation (Miscellaneous Amendments) Ordinance 2024 was gazetted on 20 December 2024 to (i) waive the stamp duty payable in respect of the transfer of real estate investment trust (REIT) shares or units and jobbing business of options market makers and (ii) adjust the stamp duty collection arrangement involving approved securities registrars under the uncertificated securities market regime. The Amendment Ordinance relating to the stamp duty waiver came into operation on 21 December 2024.

• The Rating (Amendment) Ordinance 2024 was gazetted on 1 November 2024 to implement a progressive rating system for domestic tenements with rateable value over 550,000 Hong Kong dollars (HKD). The new system will take effect from the fourth quarter of the financial year 2024/25, i.e. January to March 2025.

• The Inland Revenue (Amendment) (Tax Concessions for Intellectual Property Income) Ordinance 2024 was gazetted on 5 July 2024 to establish a patent box regime in Hong Kong, which took retrospective effect from the year of assessment 2023/24.
• The Inland Revenue (Amendment) (Tax Concessions and Two-tiered Standard Rates) Ordinance 2024 was gazetted on 31 May 2024 to give effect to the 100% reduction of profits tax for the year of assessment 2023/24, subject to a cap of HKD 3,000.
• The Stamp Duty (Amendment) Ordinance 2024 was gazetted on 19 April 2024 to give effect to the demand-side management measures for residential properties, which include (i) replacing the existing flat rate of ad valorem stamp duty payable on certain instruments dealing with residential properties with new rates that are the same as those for non-residential properties and (ii) lowering the rate of special stamp duty payable on certain instruments dealing with residential properties and the rate of buyer’s stamp duty payable on certain instruments to 0%.
• The Inland Revenue (Amendment) (Aircraft Leasing Tax Concessions) Ordinance 2024 was gazetted on 1 March 2024 to enhance the existing aircraft leasing preferential tax regime and make related amendments, which took retrospective effect from the year of assessment 2023/24.
• The Stamp Duty (Amendment) (Residential Properties) Ordinance 2024 was gazetted on 9 February 2024 to give effect to the demand-side management measures for residential properties, which include (i) shortening the applicable period of the special stamp duty from 36 months to 24 months and (ii) reducing the respective rates of the buyer’s stamp duty and new residential stamp duty from 15% to 7.5%. These measures have been cancelled through the enactment of the Stamp Duty (Amendment) Ordinance 2024, above.
• The Inland Revenue (Amendment) (Tax Deductions for Spectrum Utilization Fees) Ordinance 2024 was gazetted on 19 January 2024 to provide for tax deductions for spectrum utilisation fees (SUFs) which applies to SUFs derived in auctions conducted on or after 19 January 2024.