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HK Tax Facts

Profits Tax

In Hong Kong companies are liable to pay Profits Tax on their Net Assessable Profits. This also applies to Sole Proprietorships and Partnerships unless the individuals concerned qualify to elect to be taxed under Personal Assessment.

A key tri-part condition to being assessable to Profits Tax is that 1) the company must be carrying on business in HK; 2) profits are derived from such business; and 3) these profits are deemed to have arisen or have been derived from HK.

This important condition has allowed HK to attract companies whose business' is carried on away from HK but with the profits being booked in the HK company. Provided that the IRD accepts that the profits are offshore then they are not liable to pay Profits Tax.

Property Tax

Rental income earned from the letting of Investment Property is liable to Property Tax.

For companies which bring their rental income from investment propert into their accounts (being subject to Profits Tax) an application can be made to be exempt from Property Tax.

Salaries Tax

Individuals who receive income from employment, being an officer of a company or a Pension which has a HK source are liaible (unless exempt) to Hong Kong Salaries Tax.

Salaries are reported annually by employers generally in April and by individuals generally in May.

Salaries Tax is computed either at the standard rate of tax or after deducting at progressive rates.

Stamp Duty

Brief explanation of Stamp Duty to follow soon.