Hong Kong Tax Regulations




Hong Kong tax rates are very low by OECD standards. Taxation case law is low because the low tax rate enables the costs associated with challenging a decision of the revenue authorities outweigh any monetary gain.

Taxes are levied according to the territorial principle meaning that taxes are only levied on income derived from or arising in Hong Kong and not on income sourced outside the territory.

A number of taxes that are in most jurisdictions are not in Hong Kong. There aren’t any: capital gains taxes, withholding taxes, sales taxes, VAT, annual net worth taxes and accumulated earnings taxes on companies which retain earnings rather than distribute them.

Tax Rates in 2015

Individual

The standard rate of Salaries Tax is 15%.

Corporate

The normal rate of Profits Tax is 16.5% for corporations and 15% for unincorporated businesses.

Capital gains

Hong Kong does not levy capital gains tax.

Indirect Taxes

Hong Kong does not levy VAT, goods and services tax (GST) or sales tax.

Other Taxes

Estate Tax was ended in 2005.

Withholding Taxes

There aren’t any domestic withholding taxes on dividends, interest or royalties