Hong Kong Plans New Tax Breaks for Maritime Trade

Hong Kong is preparing to roll out new tax incentives for shipping-related businesses and commodity traders as part of efforts to reinforce its role as a leading global center for maritime services and commodities trading.

One of the main elements of the proposed legislation is a half-rate profits tax concession for physical commodity trading. Qualifying companies would pay profits tax at 8.25%, a measure the government hopes will encourage more commodity trading firms to set up or expand in Hong Kong and generate further demand for maritime services.

The bill also includes an optional concessionary tax rate of 15% for shipping-related businesses and commodity traders covered by the OECD’s BEPS 2.0 global minimum tax rules. The proposal is intended to simplify compliance and reduce the burden of complex tax calculations while keeping Hong Kong’s maritime tax regime competitive.

A spokesperson for the Transport and Logistics Bureau said a favorable tax framework remained “a key factor in attracting shipping-related companies to Hong Kong”.

The Hong Kong Shipowners Association (HKSOA) welcomed the proposed changes, noting that it had previously called for commodity trading tax concessions to support Hong Kong’s development as an international maritime hub.

HKSOA chairman Richard Hext said:

This initiative will help grow Hong Kong as an international finance, shipping and trade centre, as set out in the national plan. More commodity trading activity in Hong Kong will contribute to the co-development of all three sectors – finance, shipping and trade.”

Hong Kong has been working in recent months to attract commodity traders back to the city, with the aim of encouraging more shipping companies to follow. As part of this push, a prominent delegation attended this year’s Geneva Dry, the leading commodities shipping conference.