Government launches consultation on proposed enhancements to tax concession regime for corporate treasury centres

On 27 Jul 2026, the Financial Services and the Treasury Bureau ("FSTB") and the Inland Revenue Department ("IRD") launched a public consultation on proposed enhancements to the tax concession regime for corporate treasury centres ("CTCs"), with the consultation period lasting six weeks until September 4.

Background and Strategic Framework

Following the June publication of the Action Plan to Promote the Development of CTCs in Hong Kong, the Government established a "4T" framework covering tax revamp, tax agreements, targeted promotions, and talent dialogue to attract multinational corporations and enable existing CTCs to scale up within Hong Kong's financial ecosystem.

Tier 1: Refinement of Existing Measures

Tier 1 proposes refinements to existing tax concessionary measures for qualifying CTCs and corporations conducting intra-group financing, including deferring tax deductions for interest expenses paid to non-Hong Kong associated corporations until the income becomes taxable, expanding deduction scopes to cover broader corporate treasury activities, and providing legal clarifications on substantial activity requirements and transaction definitions to enhance tax certainty.

Tier 2: Pre-Approval Mechanism

Tier 2 introduces a five-year pre-approval mechanism for CTCs and associated corporations meeting specified conditions, offering benefits such as exemption from the "dedicated CTC condition" and "safe harbour rule," a 50% tax exemption on interest income for pre-approved Hong Kong associated corporations, exemption from the "subject to tax condition" for interest paid to non-Hong Kong associates, and removal of the "anti-tax arbitrage rule" subject to a cap set at 30% of earnings before interest, taxes, depreciation and amortisation ("EBITDA").

Government Statement and Objectives

Secretary for Financial Services and the Treasury, Mr Christopher Hui, described this consultation as a major initiative to revamp the tax regime, noting that the targeted measures address industry pain points to provide eligible corporations with comprehensive benefits, certainty, and compliance flexibility, thereby strengthening Hong Kong's position as a centralised management base for multinational funds.

Consultation Logistics and Implementation Timeline

The consultation paper is available on the FSTB webpage, with submissions accepted by post (24/F, Central Government Offices, 2 Tim Mei Avenue, Tamar, Hong Kong) or email (This email address is being protected from spambots. You need JavaScript enabled to view it.) until September 4, after which the Government targets issuing administrative clarifications within this year and introducing legislative amendments to the Legislative Council in the first half of next year.