HONG KONG SAR – Media OutReach Newswire – 2 February 2026 – CPA Australia has right this moment submitted a set of forward-looking suggestions for consideration within the Hong Kong SAR Authorities’s 2026-27 Price range. With an estimated HK$0.9 billion fiscal deficit for 2025–26 and strong fiscal reserves of HK$653 billion, CPA Australia suggest a sequence of coverage measures below the theme of “Energy Hong Kong’s Progress” specializing in 4 pillars:
- Connecting China and world markets to energy development
- Strengthening Hong Kong as a worldwide commerce and wealth hub
- Diversifying the economic system and boosting workforce competitiveness
- Elevating residing requirements for a more healthy and habitable metropolis
(from left to proper) Ms Karina Wong, Divisional Councillor and Deputy Chair of Taxation Committee of CPA Australia Higher China; Mr Janssen Chan, Co-Chair of Taxation Committee; Mr Anthony Lau, Co-Chair of Taxation Committee of CPA Australia Higher China; Mr Adam Chiu, Member of Taxation Committee of CPA Australia Higher China
Connecting China with world markets and powering Hong Kong’s future financial engine
CPA Australia emphasises that Hong Kong should reinforce its place because the premier gateway connecting China with world markets. As China’s 15th 5 12 months Plan locations higher deal with high-quality opening up, Hong Kong is uniquely positioned to assist Chinese language enterprises increase abroad whereas attracting overseas direct funding into the Mainland via Hong Kong. Strengthening this gateway operate can be vital to driving the town’s subsequent part of financial development.
Mr Anthony Lau, Co-Chair of CPA Australia’s Higher China Taxation Committee said,
“Creating a unified and coherent tax incentive framework for Company Treasury Centres (CTC) and regional headquarters (RHQ) would additional strengthen Hong Kong’s attraction as a base for multinational operations. As well as, the effectiveness of re-domiciliation has attracted many abroad corporations to maneuver their authorized domicile to Hong Kong. As there is no such thing as a clear steerage on whether or not re-domiciliation will set off Mainland tax liabilities and tax reporting obligations, we advocate the Hong Kong Authorities engages with the Mainland tax authorities to make clear that no precise switch of property happens throughout the course of, and subsequently no Mainland tax ought to come up.”
“We additionally advocate advancing market connectivity measures similar to permitting a tax deduction particularly for IPO-related bills for corporations that checklist on the Fundamental Board of the HKEX, and persevering with to reinforce present cross boundary monetary mechanisms similar to introducing an IPO Join scheme.”
A streamlined method would cut back complexity, enhance tax certainty and encourage abroad and Mainland enterprises to centralise administration, financing and strategic capabilities in Hong Kong.
CPA Australia additionally highlights the significance of positioning the Northern Metropolis as a flagship cross‑border innovation zone that may drive Hong Kong’s future development. Mr Lau mentioned, “To assist the infrastructure improvement, we propose the Authorities adopts ahead‑wanting financing instruments that ease stress on public funds. These might embrace issuing bonds focused at with an estimate quantity for instance USD2 billion at totally different maturity to worldwide buyers, and offering a tax exemption for bond holders on curiosity earnings and buying and selling earnings derived from bonds issued for Northern Metropolis infrastructure initiatives, whether or not issued by the federal government or the personal sector.
“To draw main innovation and expertise enterprises to the zone, we additional advocate broadening the scope of qualifying R&D expenditures to incorporate actions outsourced to associated events based mostly and working in different cities inside Higher Bay Space. This displays the more and more built-in nature of cross boundary innovation and provide chains.”
Strengthening Hong Kong as a worldwide commerce centre and a hub for wealth retention
Hong Kong’s lengthy‑standing position as a free, open and trusted buying and selling and monetary gateway stays central to its worldwide relevance.
Ms Karina Wong, Deputy Chair of the Higher China Taxation Committee mentioned, “Hong Kong ought to construct on its distinctive standing as a worldwide buying and selling centre by strengthening the free commerce port regime and increasing assist for high-value commodity buying and selling, which might assist diversify the town’s financial base and improve market depth. Qualifying commodity gadgets similar to silver and rare-earth supplies stay exterior the present scope, the qualifying checklist must be reviewed usually, with enough legislative flexibility, to make sure well timed updates in response to market developments. The Authorities may additionally think about whether or not the scope ought to lengthen past bodily trades and incidental earnings to cowl by-product pushed transactions, which kind a big a part of world commodities exercise.”
A stronger household workplace ecosystem is central to reinforcing Hong Kong’s position as Asia’s most popular hub for wealth administration and succession planning. “We advocate introducing a preferential 8.25 per cent earnings tax fee for Single Household Workplace, Multi Household Workplaces (MFOs) and fund managers to reinforce Hong Kong’s competitiveness relative to different regional wealth administration centres.
“Aligning the permissible funding asset lessons below the household workplace tax concession regime with these below the Capital Funding Entrant Scheme (CIES) would additionally streamline operations, present higher funding flexibility and additional strengthen Hong Kong’s attraction amongst world wealth homeowners managing long run capital,” added Ms Wong.
Modernising Hong Kong’s philanthropy framework would encourage a extra caring and compassionate group and strengthen the town’s attraction to long-term capital. “The beneficiant donations supporting residents and the reconstruction of Wang Fuk Court docket present that Hong Kong is a caring metropolis. To encourage higher philanthropic participation, we suggestremoving the present 35 per cent cap on money donation deductions and permitting a full 100 per cent deduction, whereas introducing a 300 per cent enhanced deduction for contributions to designated funds, such because the Group Care Fund and Catastrophe Reduction Fund. This is able to direct extra assets towards areas of social want.
“These reforms will strengthen Hong Kong’s ecosystem for commerce, wealth administration and philanthropy, serving to the town appeal to and retain long run capital and strengthen Hong Kong’s aggressive edge,” Ms Wong mentioned.
Diversifying the economic system and enhancing workforce competitiveness
As superior economies speed up digital transformation and undertake rising applied sciences, Hong Kong’s long-term competitiveness will rely upon the town’s potential to scale innovation, increase productiveness and strengthen the capability of its workforce and enterprises.
“We suggest to relaunch a revamped Expertise Voucher Programme to assist companies, particularly SMEs, speed up digitalisation and undertake synthetic intelligence (AI) options that improve effectivity and competitiveness.
“Strengthening R&D associated tax incentives is equally vital in driving innovation, subsequently we suggest rising the cap for the very best fee of the R&D tremendous tax deduction by elevating the brink for the 300 per cent deduction on qualifying R&D expenditure from HK$2 million to HK$4 million.” mentioned Mr Janssen Chan, Co‑Chairperson of CPA Australia’s Higher China Taxation Committee.
SMEs stay the spine of Hong Kong’s economic system, but many proceed to face price pressures and rising competitors.
“We advocate elevating the cap below the two-tier earnings tax regime for concessional 8.25 per cent half-rate from HK$2 million to HK$4 million of assessable earnings. Extending the SME Financing Assure Scheme past March 2026 is one other transfer that might ease working pressures for smaller companies and encourage reinvestment,” added Mr Chan.
By elevating the two-tier earnings tax cap, extending financing assist and retooling tech programmes for AI adoption, the Authorities may give SMEs the room to develop and strengthen their long-term resilience.
Elevating residing requirements and constructing a more healthy and extra habitable metropolis
Mr Adam Chiu, member of the Higher China Taxation Committee, mentioned the Price range ought to introduce focused tax and subsidy measures that ship sensible assist to households whereas encouraging more healthy and extra productive existence.
“To supply direct aid to taxpayers, we advocate sustaining the 100 per cent salaries tax rebate on the 2025/26 ultimate salaries tax, capped at HK$6,000. This is able to assist offset rising residing prices and assist disposable earnings, notably for center‑earnings earners. We additionally suggest introducing a tax deduction of as much as HK$60,000 for working households who make use of home helpers particularly to care for kids, aged members of the family or individuals with particular care wants. This is able to assist ease caregiving pressures, assist labour‑power participation.” Mr Chiu mentioned.
He added that lifelong studying and abilities upgrading are more and more vital in a quickly evolving economic system. “To allow people to undertake extra superior or specialised coaching, together with in rising areas similar to AI, we advocate rising the subsidy ceiling below the Persevering with Schooling Fund to HK$30,000 per eligible applicant, and rising the cap on the self-education tax deduction to HK$150,000 per yr. To advertise bodily wellbeing, we additionally suggest a tax deduction of as much as HK$2,000 for sports activities‑associated bills.”
“By supporting working households, encouraging lifelong studying and selling more healthy existence, these measures can collectively improve high quality of life and assist construct a extra resilient and inclusive Hong Kong,” Mr Chiu mentioned.
CPA Australia believes these suggestions will strengthen Hong Kong’s potential to interact extra successfully with world markets, improve its competitiveness as a world monetary and enterprise hub, and enhance high quality of life for residents. Taken collectively, these measures will assist guarantee Hong Kong is properly positioned for a extra sustainable, innovation pushed and inclusive future.
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About CPA Australia
CPA Australia is likely one of the largest skilled accounting our bodies on the planet, with greater than 176,000 members in over 100 nations and areas, together with greater than 22,500 members in Higher China. Our core providers embrace training, coaching, technical assist and advocacy. CPA Australia offers thought management on points affecting the accounting occupation and the general public curiosity. We have interaction with governments, regulators and industries to advocate insurance policies that stimulate sustainable financial development and have optimistic enterprise and public outcomes. Discover out extra at 
cpaaustralia.com.au
