2025-26 Budget – Tax Measures

A:

In the 2025-26 Budget, the Financial Secretary proposed a one-off reduction of 100% of the final tax for the year of assessment 2024/25 in respect of profits tax, salaries tax and tax under personal assessment, subject to a ceiling of $1,500 per case.

A:

You only need to file your Tax Return - Individuals (BIR60) for the year of assessment 2024/25 as usual. After the enactment of the relevant legislation, IRD will effect the tax reduction in the final assessment for the year of assessment 2024/25 (hereinafter referred to as "2024/25 assessment") and will also revise those 2024/25 assessments which are issued before the legislative amendment. There is no need for you to make a separate application.

A:

You are required to pay on time the 2024/25 provisional tax. Otherwise, recovery action will be taken by IRD. Similar to previous occasions, the tax reduction is to reduce the 2024/25 final tax that will be charged and not the 2024/25 provisional tax that has already been charged. Therefore, you are still required to pay the 2024/25 provisional tax as charged.

A:

As the tax reduction is to reduce the 2024/25 final tax that will be charged, the reduction will only be reflected in the notices of salaries tax assessment, profits tax assessment and personal assessment to be issued for the year of assessment 2024/25. The tax reduction is not applicable to the 2024/25 provisional tax. The provisional tax paid will be applied to settle the 2024/25 final tax and 2025/26 provisional tax. Excess balance, if any, will be refunded.

A:

You may use the Tax Calculator provided in GovHK to calculate your 2024/25 salaries tax and tax under personal assessment upon the implementation of the proposed tax reduction.

A:

Under personal assessment, all income of an individual taxpayer, including salaries income and business profits, will be aggregated to compute the tax payable. Hence, the amount of tax reduction for the year of assessment 2024/25 is 100% of the tax assessed under personal assessment (subject to a ceiling of $1,500) and not the tax payable under salaries tax and profits tax.

A:

Profits tax, salaries tax and tax under personal assessment for the year of assessment 2024/25 are reduced by 100%, subject to a ceiling of $1,500 per case. Under salaries tax, a married couple are separately assessed. Each of them will get a tax reduction of 100%, subject to a ceiling of $1,500. Under personal assessment, if the taxpayer elects for personal assessment separately from his / her spouse, the married couple will be separately assessed. Each of them will get a reduction of 100% of the tax assessed under their respective personal assessment, subject to a ceiling of $1,500. If the taxpayer elects for personal assessment jointly with his / her spouse, the tax reduction for the couple is 100% of their total tax assessed under personal assessment, capped at $1,500. Whether a taxpayer should apply for personal assessment jointly with his / her spouse will depend on his / her own situation. When considering an election for personal assessment for the year of assessment 2024/25, taxpayers should take into account the factor that the tax reduction for personal assessment jointly elected by a couple will be capped at $1,500. You may use the Tax Calculator provided in GovHK to calculate the tax payable under different scenarios for the year of assessment 2024/25.

A:

For each business, you can get the tax reduction of 100% of the profits tax payable for the year of assessment 2024/25, subject to a ceiling of $1,500.

A:

The profits tax reduction proposed in the 2025-26 Budget also applies to companies (including corporations and partnership businesses). They will get a one-off reduction of 100% of the final profits tax for the year of assessment 2024/25, subject to a ceiling of $1,500 per case.