Hong Kong tax system

How Hong Kong tax system works?
  • Hong Kong Tax System based on territorial concept. If the profit is made outside the state, there is no need to pay corporate tax in Hong Kong. Income from foreign sources is not taxed, even if it is transferred to Hong Kong.
  • Hong Kong’s Inland Revenue Department (IRD) takes action to regulate the state’s tax policy.
  • Legal entities of any form that conduct business and make profit on the territory of the state are required to pay income tax in Hong Kong.
  • The standard rate of Hong Kong Corporate Tax – 16.5%
Other taxes in Hong Kong
  • Dividends paid from profits that already have been subject to Hong Kong tax are not taxable in the hands of shareholders.
  • Dividends received from foreign companies are not taxable because they are income from a foreign source.
  • Hong Kong does not tax capital gains.