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.
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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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