Hong Kong - Tax Incentives for Environmentally Friendly Commercial Vehicles

Last updated: 16 April 2021
As of 1 April 2008, Hong Kongs Environmental Protection Department (EPD) has implemented an incentive scheme to encourage investment in environmentally friendly commercial vehicles meeting Euro V emission standards for heavy-duty and light-duty diesel vehicles.
Owners of such vehicles are offered a reduction in their First Registration Tax (FRT).
Under the tax concession scheme commercial vehicles include taxis, light-, medium- and heavy-goods vehicles, public and private light buses, public and private non-franchised buses and special purposes vehicles.
The rates of reduction of the FRT for different vehicle classes are as follows:
100% for taxis, light buses, non-franchised buses and special purpose vehicles;
50% for goods vehicles (except van-type goods vehicles up to 1.9 tonnes permitted gross vehicle weight); and
30% for van-type goods vehicles up to 1.9 tonnes permitted gross vehicle weight.
The waivers will range from 3.7% of the vehicles market value for taxis to 35% for vans.
The tax concessions will also be subject to caps ranging from HKD 8 500 to HKD 78 000 depending on the type of vehicle.
The tax reduction can be claimed by authorised vehicle dealers, parallel importers or individuals.
8Vehicles will need to be sold with "Environment-Friendly Commercial Vehicle Certificates" in order to qualify for the tax waiver.
Currently, four models of Toyota vans and three Mercedes-Benz trucks are the only vehicles to receive the certificate. Qualification under the scheme is temporary, as it will be reviewed each year and should requirements be tightened, the vehicle will have to meet the new qualifying standards for the incentive to be received.

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