In this course · 4 of 4
Course 3
Handle advance tax payments
4 lessons · 4 min
The short answer
Hong Kong's one-off tax reductions each cut final tax by 100% up to a ceiling: HK$20,000 for 2019/20, HK$10,000 for each of 2020/21 and 2021/22, HK$6,000 for 2022/23, HK$3,000 for 2023/24, HK$1,500 for 2024/25 and HK$3,000 for 2025/26. They apply to profits tax, salaries tax and personal assessment, and none is automatic for the next year.
The Inland Revenue Department's (IRD's) brief guide lists the one-off reductions of final tax for profits tax, salaries tax and tax under personal assessment. Each is 100% of the tax, up to a ceiling per case:
| Year of assessment | Ceiling |
|---|---|
| 2019/20 | HK$20,000 |
| 2020/21 and 2021/22 | HK$10,000 each |
| 2022/23 | HK$6,000 |
| 2023/24 | HK$3,000 |
| 2024/25 | HK$1,500 |
| 2025/26 | HK$3,000 (2026-27 Budget) |
Points to remember
- Each reduction is a one-off, enacted separately; none is automatic for the following year.
- For profits tax the ceiling applies to each business, as the IRD describes it for 2025/26.
- A reduction applies to the final tax, not provisional tax. Provisional tax for the following year is still based on the earlier year's profits, without the reduction.
- Do not budget on a reduction continuing: the amount has moved up and down.
The ceiling for 2025/26 comes from the 2026-27 Budget; the earlier ones are from the IRD's brief guide for 2025/26, which lists reductions up to 2024/25.
Legal basis and sources
The law
- Inland Revenue Ordinance (Cap. 112), as amended each year by the tax reduction legislation for that year of assessment
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
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