Can I Claim Equipment and Computer Hardware as a Business Expense in Hong Kong?
Yes. 100% initial allowance in the year of purchase for qualifying plant and machinery. This is one of HK's most generous tax incentives and far exceeds most other jurisdictions.
What Inland Revenue Department (IRD) says
Section 39B(1) of the Inland Revenue Ordinance provides a 100% initial allowance in the year of purchase for prescribed fixed assets, which includes computers, servers, office equipment, and plant and machinery. Annual allowances of 20% or 30% (reducing balance) apply for subsequent years if the initial allowance is not claimed in full. Most small businesses claim the full 100% immediately.
When you can claim
- Laptops, desktop computers, and workstations used for business
- Servers and network equipment for the business
- Smartphones and tablets used primarily for business
- Office equipment: printers, scanners, telephone systems
- Specialist machinery or tools used in the trade
When you cannot claim
- Assets used exclusively for personal purposes
- Software subscription fees (these are revenue expenses deductible under Section 16, not capital allowances)
- Assets not owned by the company (rented or leased equipment may be deducted as rental expense instead)
Good to know
Pro tip: The 100% initial allowance is a substantial benefit and one of the most compelling tax features for tech businesses in HK. Unlike the UK's Annual Investment Allowance (which has a cap) or Australia's instant asset write-off (with thresholds), Hong Kong has no cap on the initial allowance. Buy the equipment before year-end to capture the full deduction in the current year.
Related expenses
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