In order to improve the fiscal health of the city, the Hong Kong government in its 2024–25 Budget, reintroduced Hotel Accommodation Tax Ordinance (Cap. 348) (HATO) to resume the collection of the hotel accommodation tax (HAT) at a rate of 3 percent, effective from 1 January 2025.^[1]

This tax will be calculated based on the accommodation charges imposed by the accommodation provider.

Initially introduced in 2002, it was waived in 2008 during the global financial crisis to promote tourism. In the 2024–25 Budget Speech, Hong Kong's Financial Secretary announced the reinstatement of this tax as part of fiscal consolidation measures.

The HAT is imposed on hotel and guesthouse accommodation and is levied on the accommodation charges payable by guests to hotel or guesthouse proprietors.

Compliance

Starting from the effective date, 1 January 2025, any hotels and guesthouses whose premises are covered by the definition of “hotel” under the HATO will be required to comply with the quarterly obligations of paying the HAT at a rate of 3 percent on all accommodation charges and filing the HAT return with the Inland Revenue Department (IRD) within 14 days after the quarter-end date.

Exemptions

HAT shall not be applicable in the following cases:

• HAT does not cover accommodations with less than 10 rooms normally available for lodging guests or established for not-for-profit purposes by a society.
• HAT shall not be imposed where the accommodation charge is less than HK$15/day.
• HAT will not be imposed on long-term accommodations, i.e., where occupants stay in the same hotel for not less than 28 consecutive days.

How we can support you

Our team at A&M can offer you comprehensive services to help you navigate the ordinance. We can provide legal guidance, compliance assessments and other related services. Please feel free to reach out to us if you have any questions or would like to discuss any aspects of the same.

[1]“Hotel Accommodation Tax,” Government of Hong Kong SAR, Inland Revenue Department, accessed April 23, 2025, https://www.ird.gov.hk/eng/tax/hat.htm