Viewpoints from our tax leaders
“This year’s Budget 2026-27 embodies balance and foresight, underpinned by a fiscal position that has improved significantly from the originally forecast HK$67 billion consolidated deficit to a consolidated surplus of HK$2.9 billion. The Budget recognises that tax policy is central to economic competitiveness and sets out new and enhanced measures, many of which we have long championed. The establishment of an Advisory Committee on Tax Policy to solicit views from stakeholders ensures Hong Kong’s tax policy better supports economic development. When properly and effectively implemented, well targeted incentives, aligned with the priorities set out in the nation’s 15th Five Year Plan, can help position frontier industries as engines of growth, driving the next phase of Hong Kong’s economic development.”
— Jeremy Ngai, PwC China South Tax Leader
“We welcome the inclusion of precious metals in the qualifying investment assets list under the unified fund tax exemption regime in this year’s Budget. This enhances Hong Kong’s appeal to investment funds and supports the development of the gold market. Alongside establishing the Hong Kong Precious Metals Central Clearing Company Limited and exploring deeper Shanghai–Hong Kong gold market connectivity, gradually expanding vault capacity, and the new measures announced today, such as exploring tax incentives for institutions conducting gold trading and settlement in Hong Kong, are strengthening the ecosystem and ushering in a ‘golden era’ for Hong Kong.
As global supply chains and trade continue to evolve, Chinese Mainland enterprises are accelerating their ‘go global’ strategies. With its free flow of capital, Hong Kong remains the preferred hub for establishing corporate treasury centres (CTCs). We have consistently advocated enhanced tax policies and incentives for CTCs. We welcome the proposed additional tax incentives for CTCs and their associates, along with the introduction of a pre-approval mechanism. These timely measures will support Chinese Mainland enterprises expanding abroad while benefiting multinational companies investing into the Chinese Mainland. These incentives will further reinforce Hong Kong’s role as a ‘super connector’: attracting overseas enterprises and helping Chinese Mainland enterprises to ‘go global’.
We welcome the Government’s proposed measures to promote the development of the REIT market, including the stamp duty waiver for transferring non-residential properties into REITs seeking to list in Hong Kong. We are pleased that the Financial Secretary has accepted our proposal to relax the criteria for stamp duty relief by broadening the scope of eligible associated bodies corporate in relation to intra-group asset transfers. Particularly encouraging is that this measure will apply retrospectively to instruments signed from today. Such initiatives will strengthen Hong Kong’s position as an international business centre.”
— Rex Ho, PwC Asia Pacific Financial Services Tax Leader
“We applaud the Government’s ongoing efforts to enhance Hong Kong’s family office ecosystem. In particular the proposed expansion of the qualifying investment list under the family office tax concession to cover precious metals and specified commodities is a measure which we have consistently advocated for. To further attract global talent and investors, in addition to regularly reviewing and enhancing talent schemes, the Government should accelerate the granting of Hong Kong residency status to principals of eligible family offices and their families. Additionally, the Government should consider raising the cap on residential property counted toward the investment threshold under the New Capital Investment Entrant Scheme (New CIES) to HK$15 million, aligning it with non-residential property. We also recommend aligning the qualifying investment lists under the New CIES and the family office tax concession, to enhance synergy.
We commend the Government’s plan to introduce a bill enhancing maritime tax concessions and granting half rate tax concessions for eligible commodities traders. These are measures we have long recommended. As the Chinese Mainland is a major importer and producer of commodities, and worldwide demand for precious metals continues to surge, the Government’s initiatives to promote the gold market will help Hong Kong strengthen its commodities ecosystem. To build a thriving market, a robust physical warehousing system is essential. We therefore suggest that Hong Kong prioritise strengthening its storage infrastructure, to consolidate and enhance its strategic role within the global supply chain.”
— Agnes Wong, PwC China South Private Clients and Family Office Tax Leader
“We welcome the proposed enhancement to the R&D tax deduction rules to provide stronger support for cross-border R&D activities in this year’s Budget. This is something we have long advocated for, in addition to the current review of IP deductions. In line with the Government’s strategic focus on Artificial Intelligence (AI), the Government should consider our recommendation of introducing enhanced deductions for AI-related expenses to support the digital transformation of businesses, particularly SMEs. This has become more pressing since Singapore recently announced a 400% tax deduction, capped at S$50,000, for qualifying AI adoption expenditures, for the years of assessment 2027 and 2028.”
— Kenneth Wong, PwC Hong Kong Tax Controversy Services Leader
“For asset tokenisation to reach its full potential, data, ownership and settlement must be recorded natively on interoperable distributed networks, and Hong Kong must develop the market infrastructure to support liquid markets in these assets. Trust also needs to be embedded through strong investor protection and appropriate regulatory oversight. This Budget sets out a clear roadmap for the new digital financial ecosystem, including (i) the follow-up after the launch of Project Ensemble and the licensing of the first batch of HKMA-regulated stablecoin issuers which solve for settlement; (ii) allowing debenture registers to be kept on distributed ledgers which moves ownership ‘on chain’; and (iii) the regulation of digital asset dealing and custody providers, together with the CMU Omniclear digital assets platform. With these building blocks in place, Hong Kong will be well positioned to capture investment and transaction flows in the new digital economy.”
— Peter Brewin, PwC Hong Kong Digital Assets Leader
Viewpoints from our industry leaders
“We are pleased to see the Government’s ongoing commitment to developing the Northern Metropolis (NM) and its flexible approach to the development model such as a tripartite co-operation between developers owning land in the NM, technology or advanced manufacturing enterprises and the Government. In setting land premiums or rental values, the Government should weigh short-term returns against long-term benefits. These include economic growth, innovation, technology capacity building, and local talent development. This balanced perspective should guide evaluations, contract negotiations and subsequent performance monitoring. In addition, the Government might consider flexible risk-sharing arrangements with companies establishing offices in the NM. For example, offering reduced rental fees during the initial years in exchange for revenue sharing could encourage investment while managing risks. Such measures would support sustainable growth and strengthen Hong Kong’s innovation ecosystem in the region.”
— Albert Wong, PwC Hong Kong Public Sector Consulting Partner
“This budget is embedding AI at the heart of Hong Kong’s economy. It advances the goal of establishing the city as a pivotal hub for global AI development. The alignment with the nation’s 15th Five-Year Plan and the newly created ‘Committee on AI+ and Industry Development Strategy’, coupled with the AI supercomputing centre and concrete funding mechanisms such as AI Subsidy Scheme and Innovation and Technology Industry‑Oriented Fund, provide the ‘golden triangle’ of compute, capital, and policies to promote the ‘industries for AI’ and ‘AI for industries’ initiative. We are glad to see that this budget moves beyond rhetoric by investing in AI training and bridging upstream research with downstream commercial applications. This will position Hong Kong as a premier testbed for ‘AI+’ solutions, leveraging our unique connectivity to attract AI talent and capital to drive regional innovation.”
— James Lee, PwC China Consulting AI Leader
“Financial Secretary Paul Chan’s 2026–27 Budget is a sharp and prudent plan that strengthens fiscal resilience amid steady economic momentum. The Operating Account returned to surplus a year ahead of schedule, boosted by strong stamp duty from a vibrant stock market, while the Consolidated Account has also returned surplus. Solid reserves provide a robust buffer against global risks such as geopolitical tensions and capital flow volatility. We welcome the continued bond issuance, which funds strategic infrastructure like the Northern Metropolis at low cost. This creates resources for innovation, technology, AI opportunities, and industry modernisation—closely aligned with China’s 15th Five Year Plan. Concurrently, the Reinforced Fiscal Consolidation Programme keeps expenditure disciplined, ensuring long term sustainability. At PwC, we view this Budget as a balanced, forward-thinking strategy: it secures fiscal stability while elevating Hong Kong’s role in national development and the Greater Bay Area.”
— Jackie Yan, PwC China Economist
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