Deloitte: Hong Kong's fiscal budget is expected to record a surplus of 15.6 billion Hong Kong dollars. It is suggested to provide tax credits to companies in the northern metropolitan areas for investment.

Deloitte China's Hong Kong Tax and Business Advisory Services Partner Liu Mingyang estimates that the fiscal budget for Hong Kong in 2025/26 will be roughly balanced, with a surplus of approximately 15.6 billion Hong Kong dollars. The fiscal reserves are expected to be around 669.9 billion Hong Kong dollars as of March 31, 2026 (compared to 654.3 billion Hong Kong dollars in the same period last year), an increase of 2.4% year-on-year. Deloitte has put forward preliminary suggestions for the 2026/27 Hong Kong fiscal budget. Deloitte China's Hong Kong Tax Technology Center Managing Partner Qi Weizhi suggested that the development of the Northern Metropolis Area should be promoted as a new growth engine for Hong Kong. In terms of encouraging businesses to establish themselves and invest in the Northern Metropolis Area, the suggestion includes providing investment tax exemptions, investment subsidies, and offering a 150% special tax deduction for interest expenses and professional fees incurred for issuing bonds to support the development of the area. In order to promote the development of the Innovation and Technology Hub, Qi Weizhi proposed establishing a specific tax framework for the Greater Bay Area Shenzhen-Hong Kong Innovation and Technology Collaboration Zone, and extending Hong Kong's tax incentives to activities in the Shenzhen region of the collaboration zone. Deloitte China's Hong Kong Fiscal Budget Team Leader Yin Peiyi suggested that tax optimization should be used to promote dual listings and drive capital investment. To attract more companies to pursue dual listings in Hong Kong, suggestions include providing a "safe harbor" for companies with dual listings in Hong Kong, and reducing the stamp duty rate on share transactions of companies involved in dual listings by 0.05%. Regarding the improvement of the Corporate Treasury Center (CTC) tax incentive system, Yin Peiyi suggested changing the "actual tax" condition for interest expense deductions to an "applicable tax rate" standard, and providing unilateral tax credits for CTC income, as well as offering a 15% preferred tax rate option for enterprises within the core pillar two range. Deloitte China's Hong Kong Financial Services Tax Partner Pan Zongjie expressed the hope to maintain Hong Kong's competitive advantage as a regional asset and wealth management center, including providing preferential tax systems for eligible fund managers by lowering the capital gains tax rate on their related income to 8.25%; suggesting preferential tax regimes for eligible licensed digital asset market participants; providing preferential tax treatment for eligible single family offices; further enhancing tax exemptions for FIHV (family investment holding vehicles); and strengthening the charity ecosystem. Yin Peiyi commented that the Hong Kong government has been actively optimizing the listing system over the past two years, introducing many new measures to attract companies to list in Hong Kong. If the Hong Kong government continues to enhance the listing system, it is believed that more US-listed Chinese companies will choose to list in Hong Kong, further boosting the stock market.