[World Tax Updates] Sri Lanka Concessions | Hong Kong Budget and More
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- Last Updated on 1 March, 2026
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Editorial Team – [2026] 183 taxmann.com 722 (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. Sri Lanka Introduces Revised Criteria and Tax Concessions for Strategic Development Projects
Sri Lanka’s Ministry of Finance has issued Regulations under the Strategic Development Projects Act, No. 14 of 2008 (originally published in Gazette No. 2474/66 dated 8 February 2026). The Regulations prescribe the eligibility conditions for recognition as a Strategic Development Project and specify the applicable tax concessions.
The eligibility framework is divided into three categories/sectors, with the corporate income tax holiday (exemption) periods as follows:
Category A – Infrastructure, Services & Utilities, and Tourism and Leisure (excluding casinos and any form of betting and gaming)
- 6-year holiday – Investment exceeding USD 50 million up to USD 150 million and creation of at least 100 local jobs.
- 8-year holiday – Investment exceeding USD 150 million up to USD 300 million and creation of at least 100 local jobs.
- 10-year holiday – Investment exceeding USD 300 million and creation of at least 100 local jobs.
Category B – Manufacturing
- 5-year holiday – Investment exceeding USD 50 million up to USD 100 million and creation of at least 250 local jobs.
- 8-year holiday – Investment exceeding USD 100 million up to USD 150 million and creation of at least 250 local jobs.
- 10-year holiday – Investment exceeding USD 150 million and creation of at least 250 local jobs.
Category C – Agriculture; Educational, Technological Establishments; and Information Communication Technology
- 5-year holiday – Investment exceeding USD 50 million up to USD 100 million and creation of at least 50 local jobs.
- 8-year holiday – Investment exceeding USD 100 million up to USD 150 million and creation of at least 50 local jobs.
- 10-year holiday – Investment exceeding USD 150 million and creation of at least 50 local jobs.
Projects that satisfy the prescribed eligibility conditions are also exempt from Customs Import Duty (CID), Value Added Tax (VAT), Ports and Airports Development Levy (PAL), and CESS (under the Sri Lanka Export Development Act) on the import of capital goods and construction materials during the project implementation period.
For this purpose, the “project implementation period” means the period commencing from the date specified in the agreement between the Board of Investment of Sri Lanka and the project enterprise and ending on the date of commencement of commercial operations as certified by the Board of Investment.
Source – The Strategic Development Projects Act, No. 14 of 2008
2. Hong Kong Budget 2026-27 – Key Tax Measures
On 25 February 2026, Hong Kong Financial Secretary Paul Chan presented the 2026-27 Budget, proposing several tax changes. Key measures include:
- A 100% reduction of salaries tax, personal assessment tax, and profits tax for YA 2025/26, capped at HKD 3,000 per case.
- Rates concessions for domestic and non-domestic properties for the first two quarters of 2026/27, capped at HKD 500 per property.
- Increase in basic and single parent allowance to HKD 145,000 and married person’s allowance to HKD 290,000.
- Child allowance raised to HKD 140,000.
- Higher allowances for maintaining dependent parents/grandparents and increased elderly residential care deduction ceiling to HKD 110,000.
- Stamp duty on residential properties above HKD 100 million increased to 6.5%.
- Expanded tax concessions for family offices, funds, REITs, Corporate Treasury Centres, and intra-group restructuring.
- Implementation of the Crypto-Asset Reporting Framework and revised Common Reporting Standard within two years.
- Introduction of preferential tax packages for targeted enterprises and enhanced concessions for the maritime sector.
- Refinement of IP tax regime and exploration of incentives for gold trading institutions.
Additionally, Hong Kong has implemented the Pillar Two global minimum tax, expected to generate about HKD 15 billion annually from 2027-28.
Source – Budget.gov
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