[World Tax News] Hong Kong Shipping Tax Concessions and Global Tax Updates
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- Last Updated on 22 June, 2026
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Editorial Team – [2026] 187 taxmann.com 691 (Article)
World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week:
1. Hong Kong proposes enhanced tax concessions for shipping-related activities
The Hong Kong Inland Revenue Department has announced the publication of the Inland Revenue (Amendment) (Tax Concessions for Shipping-related Activities and Physical Commodity Trading) Bill 2026 on 12 June 2026. The Bill proposes amendments to the Inland Revenue Ordinance (Cap. 112) to enhance the existing tax concessions for shipping-related activities and introduce a new half-rate profits tax concession regime for physical commodity trading.
To facilitate compliance with the OECD’s BEPS 2.0 framework, the Bill proposes an additional option that allows eligible shipping-related companies to elect a 15% concessionary tax rate annually under the existing preferential tax regimes. The measure is intended to reduce compliance costs associated with the complex tax calculations required under BEPS 2.0 for operations conducted in Hong Kong.
The Bill also proposes a new half-rate profits tax concession for physical commodity trading to strengthen Hong Kong’s maritime services ecosystem and attract commodity traders to establish or expand their operations in the jurisdiction. The proposed 15% concessionary tax rate option will likewise be available under this new regime.
Since 2020, Hong Kong has introduced a series of tax concessions to encourage shipping-related businesses to establish or expand their presence in the city. These measures have yielded tangible results, with the number of qualifying ship lessors benefiting from the concessions increasing fivefold during the assessment years 2020/21 to 2023/24.
The proposed amendments come against the backdrop of significant developments in the international tax landscape, particularly the OECD’s BEPS 2.0 initiative, which addresses base erosion and profit-shifting risks arising from the digitalisation of the economy. Hong Kong has already implemented the Hong Kong Minimum Top-up Tax, which requires in-scope multinational enterprise groups to pay a top-up tax from 2025 if the effective tax rate of their constituent entities in Hong Kong is below 15%.
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