Hong Kong Tax News Flash
October 2026, Issue 14
Government proposes tax concession under preferential policy package to attract strategic industries and investments
Following the 2026 Policy Address announced in September 2026, the Government has recently set out in a paper submitted to the Legislative Council (LegCo) Panel on Financial Affairs more details of the proposed concessionary tax regime under the preferential policy package to attract strategic industries and investments.
The proposed regime would target qualifying enterprises operating in key sectors such as advanced manufacturing, research and development in innovation and technology, headquarters activities, logistics and supply chain management, and finance. Approved enterprises could enjoy a concessionary tax rate of 5% or half-rate (i.e. 8.25% for corporations) for up to five years, subject to minimum substantial activity thresholds and ongoing compliance with the conditions set out in the approval certificate. Extension beyond five years would be available through a fresh application supported by a new investment or development plan. While the proposed regime would be available to both enterprises newly established in Hong Kong and those already operating in Hong Kong, for the latter the concession would apply only to qualifying incremental profits derived from the relevant activity.
The Government plans to introduce an amendment bill into the LegCo in December 2026, with a view to implementing the proposed regime with effect from the year of assessment 2027/28.
This news flash outlines the key features of the proposed regime and sets out our observations.
Contact us
South Private Clients and Family Office Tax Leader, PwC Hong Kong
Tel: +[852] 2289 3816
