Hong Kong 2026 Policy Address: 5% tax concession, IP deductions and family tax relief

Country reference

• Country: Hong Kong (planned expansion country)
• Authorities: Chief Executive; Inland Revenue Department (IRD); Financial Services and the Treasury Bureau (FSTB)
• Topic: Tax measures in the 2026 Policy Address
• Key date: Delivered 16 September 2026; most measures need legislation
• Law: Inland Revenue Ordinance; Stamp Duty Ordinance

For businesses

• 5% or half-rate concession: may be offered under preferential policy packages to high value-added enterprises setting up headquarters or regional headquarters to manage supply chain and sourcing, depending on their investment plan and contribution to Hong Kong.
• Corporate treasury centres: a bill on extra benefits for pre-approved centres is expected in the first half of 2027.
• Intellectual property: a bill this year to allow tax deductions for capital spending on IP rights, to support IP trading.

For individuals and families

• Child allowance: rises from HK$140,000 to HK$160,000 for the second and later children born on or after 16 September 2026; the additional allowance in the birth years also rises to HK$160,000. Effective from 2026/27, after legislation.
• Stamp duty: a waiver of up to HK$20,000 on a home purchase by families with a child born in Hong Kong on or after 16 September 2026, within one year before and two years after the birth.

Already in progress

• Bills on funds, family offices and carried interest, and on shipping and commodity trading concessions, are before the Legislative Council.
• A Stamp Duty bill would extend group relief to 75% ownership.

What to do now

• Groups planning an Asian headquarters or sourcing hub: ask the Government’s investment promotion agencies about the preferential packages before setting up.
• Track the IP and treasury centre bills for start dates.
• Employers: update payroll guidance on the new child allowance once enacted.

Our take

The 5% offer is targeted and negotiated, not automatic. Combined with the territorial system, it makes Hong Kong a serious option for a regional supply chain hub, but the terms will depend on substance.