Hong Kong moves to ease intellectual property tax deductions

The amendments will apply to contracts entered into on or after 1 April.

The Inland Revenue (Amendment) (Tax Deductions for Intellectual Property Expenditure) Bill was published in the Government Gazette

The bill aims to relax tax deduction arrangements for capital expenditure on purchasing Intellectual Property (IP) rights from associates; IP rights used by a licensee outside Hong Kong; and upfront license fees for IP rights use.

The Commerce & Economic Development Bureau said the bill pushes the measure announced in the 2025-26 and 2026-27 budgets to enhance tax deductions for local IP.

The bureau said that lower costs for IP transactions can bring more IP trading activities, thereby supporting the development of knowledge-intensive industries in the city.

Amendments proposed will apply to contracts entered into on or after 1 April

The bill will be introduced in the Legislative Council for first and second readings on October 28.