Hong Kong Introduces Bill to Expand Tax Deductions for Intellectual Property Expenditure

The Hong Kong government has published the Inland Revenue (Amendment) (Tax Deductions for Intellectual Property Expenditure) Bill 2026 in the Government Gazette. The legislation seeks to broaden the scope of tax deductions available to companies that spend on intellectual property (IP) assets. Under the bill, firms can claim deductions for capital outlays on IP rights purchased from related parties, IP used by licensees outside Hong Kong, and upfront licence fees. The changes will apply to contracts signed from April 1, 2026, and are intended to reduce transaction costs, encourage IP trading, and support the growth of knowledge‑intensive industries. The bill will be presented to the Legislative Council for debate on October 28.