HK passes bill to implement global minimum tax on multinationals

Effective from 1 January 2025.

The Legislative Council has passed the Inland Revenue (Amendment) (Minimum Tax for Multinational Enterprise Groups) Bill 2024, introducing a global minimum tax (GMT) and a Hong Kong-specific top-up tax (HKMTT) starting 1 January 2025.

The bill aligns Hong Kong with the OECD’s Base Erosion and Profit Shifting (BEPS) 2.0 framework, targeting tax avoidance by large multinational enterprise (MNE) groups. It requires MNEs with annual global revenues of at least €750m to pay a minimum effective tax rate of 15% in each jurisdiction where they operate.

The government will collect a top-up tax from MNEs operating locally if their effective tax rate falls below 15%, preventing other jurisdictions from claiming the difference.

The move protects Hong Kong’s taxing rights and ensures compliance with international tax standards.

The government expects to generate about $15b in additional annual revenue starting from the 2027-28 fiscal year.

Financial Services and the Treasury Secretary Christopher Hui said the changes reinforce Hong Kong’s support for global tax cooperation and strengthen its position as a business hub.

The Inland Revenue Department has set up a dedicated team to assist affected companies and will issue online guidance to support compliance.