Tax system in Hong Kong
The tax system under the Hong Kong Inland Revenue Ordinance is relatively simple. There are three distinct and separate headings under which tax is levied:
Profits tax (illustrative rate 2015/16: 16.5%)
Corporations, partnerships, trustees and bodies of persons carrying on any trade, profession or business in Hong Kong are chargeable to tax on all profits (excluding profits arising from the sale of capital assets) arising in or derived from Hong Kong from such trade, profession or business.
Salaries tax (illustrative rate 2015/16: 15%)
In general terms, this tax is imposed on income arising in or derived from Hong Kong from an office, employment or pension. In deciding whether income “arises in or is derived from Hong Kong”, it is necessary to establish where the employment—for example, the source of the income—is located.
Property tax (illustrative rate 2015/16: 15%)
Property tax is levied on the owners of real estate situated in Hong Kong. A corporation letting property in Hong Kong is regarded as carrying on business in Hong Kong and may be subject to profits tax in respect of its property income (subject to the facts and applicable rules).
Tax rates and rules change from year to year. Confirm current rates, allowances, and filing obligations with the Inland Revenue Department or your professional adviser.
Tax representative service
Our accountants work with clients to meet Hong Kong tax filing requirements, with tax planning and advice to help manage the tax affairs of your business.
Appoint us as your tax representative to assist in dealing with the Hong Kong Inland Revenue Department (IRD) in relation to enquiries, annual filing, investigations, and related matters.
Service scope
Annual tax filing
Supported by professional accountants with a clear view of tax-related issues across your reporting and compliance cycle.
Tax investigation
Handling queries and investigations raised by the tax authorities. These may arise from sample checks, or where there is cause for further review on the Department’s records. Careful handling helps limit exposure to additional assessments, penalties, and disputes.
Tax exemption claim
A feature of the Hong Kong tax system is the territorial principle. In broad terms, a Hong Kong company may not be required to pay tax on income generated outside Hong Kong where the facts support an offshore claim and appropriate documentation is maintained.