Hong Kong corporate treasury centres: action plan and new tiered tax regime

Country reference

• Country: Hong Kong (planned expansion country)
• Authorities: Financial Services and the Treasury Bureau (FSTB); IRD
• Topic: Tax concession regime for corporate treasury centres (CTCs)
• Key date: Action plan 9 June 2026; consultation 27 July to 4 September 2026; bill expected first half 2027
• Law: Inland Revenue Ordinance

The action plan

On 9 June 2026 the Government set out an action plan to attract more multinational treasury centres and help existing ones grow. It covers a tax revamp, a wider treaty network, targeted promotion to Mainland and Asian groups, and talent.

Proposed tiered regime

• Tier 1, refine the current regime: defer the deduction for interest paid to a non-Hong Kong associate until that associate is taxed on it; extend the interest deduction to more corporations; clarify the substantial activity test, benchmarks for intra-group financing and the definition of treasury transactions.
• Tier 2, pre-approval for five years: relief from the dedicated CTC condition and safe harbour rule; a 50% exemption on interest income that pre-approved Hong Kong associates earn from the CTC; and full deductions for expenses paid to the CTC, with interest deductions capped at 30% of EBITDA.

Timeline

• Consultation closed on 4 September 2026.
• Administrative clarifications are expected in 2026.
• Amending legislation is expected in the Legislative Council in the first half of 2027.

What to do now

• Map current intra-group financing through Hong Kong against the proposed tiers.
• Check the 30% of EBITDA cap against expected interest flows.
• Consider whether a pre-approved CTC would replace financing now booked elsewhere in the region.

Our take

For Gulf and Asian groups choosing a regional cash pool, the pre-approval route adds certainty that the current rules lack. Design structures now, but wait for the bill before moving balances.