Category: News (CNS)

Information technology has spread through all areas of our life and influenced virtualization of bank sphere.

Traditional banks aren’t as mobile as virtual banking which can offer a new kind of services in banking and satisfy the needs of different groups of clients. The main feature of this banking is working only through Internet without traditional branch office and some operate only mobile app.

From the moment of opening the 1^st virtual bank in the world “Security First Network Bank” passed 22 year. Only in 2017 year in Hong Kong was announced about intention to begin “A New Era of Smart Banking”. In 2020 year already 8 virtual banks has begun its work: ZA Bank Limited, Airstar Bank Limited, Ant Bank, Livi Bank Limited, Fusion Bank, Mox Bank Limited, Ping An OneConnect Bank, WeLab Bank. Za Bank Limited is the first virtual banks in Hong Kong launched an opportunity to issue a debit cards for new clients, and also started new foreign incoming payments.

Hong Kong Monetary Authority (HKMA) expects that virtual banking development will help to promote high technology and innovation not only in this sphere. The focus is on local business, mostly personal banking, but corporate services for SME are becoming more and more popular.

Our company will help to understand the specifics of opening bank account in Hong Kong and China.   

This article is about features of the profit tax in Hong Kong

1. The Hong Kong tax system is based on the territorial principle. If the company’s profit is originated from outside Hong Kong, there are legal ways not to pay corporate tax in Hong Kong. Income from foreign sources is not taxed, even if it was moved to Hong Kong. Anyway there are corporate bodies who prefer to become tax resident of Hong Kong, even if they are working outside, mostly because of low profit tax and easy to follow tax policy.

2. Legal entities that make business and profits on the territory of Hong Kong must pay income tax in Hong Kong on a regular base. It also applies to other jurisdictions that are registered as tax residents in Hong Kong. There are some minor details that can be stipulated as activity in Hong Kong or activity outside Hong Kong.

3. The company’s loss is accumulated for over a period of 5 years, and income tax will be accrued only after company’s full repayment of its loss.

4. In Hong Kong the corporate tax is progressive. Currently, the standard rate of corporate tax in Hong Kong is 16.5%. The tax rate for small corporations with income is less than 4 million GK dollars, the tax rate is only 8%. This is almost the lowest income tax rate in the world.

Our company helps to understand all the features of taxation in Hong Kong and can be tax agent between corporate body and Inland Revenue Department.