Hong Kong shipping and commodity trading: half-rate concession and a 15% option

Country reference

• Country: Hong Kong (planned expansion country)
• Authorities: Inland Revenue Department (IRD); Financial Services and the Treasury Bureau (FSTB)
• Topic: Tax concessions for shipping-related activities and physical commodity trading
• Key date: Bill gazetted 12 June 2026; first reading 24 June 2026
• Law: Inland Revenue (Amendment) (Tax Concessions for Shipping-related Activities and Physical Commodity Trading) Bill 2026

What the bill proposes

• Physical commodity trading: a new half-rate profits tax concession, which is 8.25% for corporations given the standard 16.5% rate.
• Shipping: enhancements to the existing concessions for shipping-related activities, including tax deduction arrangements in line with international standards.
• 15% option: businesses in multinational groups within the global minimum tax can elect, year by year, a 15% concessionary rate instead.

WHY A 15% OPTION

A group with revenue of EUR 750 million or more pays top-up tax to reach a 15% effective rate under Pillar Two. A concession below 15% would mostly be taxed back, through Hong Kong’s own minimum top-up tax or elsewhere. The annual 15% election lets these groups keep the regime’s other benefits without creating top-up tax.

Context

• The bill was gazetted on 12 June 2026 and read for the first time on 24 June 2026.
• Hong Kong is also offering a 5% concession for high value-added headquarters managing supply chains, under the 2026 Policy Address.

What to do now

• Commodity traders: map which profits are from physical trading and how much activity is in Hong Kong.
• Large groups: model the half-rate against the 15% election under Pillar Two.
• Watch the bill’s progress and commencement date.

Our take

Gulf energy, metals and agricultural traders with Asian desks should look closely. The details of qualifying activity will decide whether a Hong Kong hub beats Singapore or Dubai.