Learn About Incorporating > Information on Hong Kong > Hong Kong Taxes
The following serves as an introductory guide to the common taxes in Hong Kong. It is not a full illustration and it does not constitute any kind of tax advice or tax planning. You need to consult a lawyer or tax professional for professional advice on all tax issues.
Persons, including sole proprietorships, partnerships or corporations carrying on any trade, profession or business in Hong Kong are chargeable to tax on all profits (excluding profits arising from sale of capital assets) arising in or derived from Hong Kong from such trade, profession or business. A person may therefore derive profits from abroad without suffering tax; conversely, a non-resident may suffer tax on profits arising in Hong Kong. No tax is levied on profits arising abroad, even if they are remitted to Hong Kong.
Generally, all outgoing and expenses, to the extent to which they have been incurred by the taxpayer in the production of chargeable profits, are allowed as deductions.
Profit tax rate for the year of assessment 2008/09 is as follows:
Generally, a newly incorporated business will receive its first Profit Tax Return about 18 months after the date of incorporation. Then, the annual execise to issue Profit Tax Returns in bulk takes place on the first working day of April each year. It is the practice of the Inland Revenue Department not to call for the annual submission of Profit Tax Return in instances where trade or business carried on does not give rise to assessable profits or where it has not commenced or has ceased and not recommenced. However, upon receipt of a Profit Tax Return which may be issued from time to time in the course of reviewing their future tax potential, the requirement to lodge the return form must still be complied with.
|Sole proprietorships and partnerships||15%|
Profit Tax Return should be filed within one month from the date of issue. Extension is generally granted to taxpayers who make up their annual accounts after 30 November:
|Extended Due Date||Accounting Date|
|16 August||D Code Returns (1-31 December)|
|15 November||M Code Returns (1 Jan to 31 March)|
|31 January||M Code Returns (current year loss cases)|
The Stamp Duty Ordinance (Cap. 117) imposes duty on certain types of documents (conveyance on sale, agreement for sale of residential property, lease of immovable property, and transfer of Hong Kong stock).
On transfer of Hong Kong stock, stamp duty on sale or purchase of any Hong Kong stock is charged at rate which vary with the amount or value of the consideration as follows:
|Sold/Bought Note||0.1% of consideration/value on every sold note and bought note
|Instrument of Transfer||HK$5|
Sales Tax / VAT
There is no Sales Tax / VAT in Hong Kong.
Capital Gain Tax
There is no Capital Gain Tax in Hong Kong.
Source : Web site of Inland Revenue Department of Hong Kong 2005