How much is corporate tax in Hong Kong?

In Hong Kong, for Single-Tier Tax System: corporations are taxed at 16.5% on assessable profits and unincorporated businesses are taxed at 15%. With effect from 1 April 2018, a two-tiered profits tax rates regime applies.

How does Hong Kong tax work?

Hong Kong SAR does not impose income tax based on an individual’s total income. That is, business or trading profits are taxed under profits tax, income from employment, office, or pension is taxed under salaries tax, and rental income from immovable property is taxed under property tax.

Individuals are taxed at progressive rates on their net chargeable income (i.e. assessable income after deductions and allowances) starting at 2% and ending at 17%; or at a standard rate of 15% (2013/14 onwards#) on net income (i.e. income after deductions), whichever is lower.

Does Hong Kong have indirect tax?

The main forms of direct taxation in Hong Kong are profits tax, salaries tax and property tax. Indirect taxes in Hong Kong includes stamp duty, which is payable in respect of certain kinds of documents – primarily relating to the sale or lease of immovable property in Hong Kong and the transfer of Hong Kong stock.

What is the corporate tax rate in Hong Kong?

Qualifying profits derived by a qualifying corporate treasury centre are subject to profits tax at a concessionary tax rate of 8.25% (i.e. 50% of the regular profits tax rate) under specified conditions.

Do you have to pay tax on profits in Hong Kong?

Profits derived from carrying on a trade, profession or business in Hong Kong is subject to profits tax (i.e. corporate tax). However, the rates of tax vary for different business entity types. Hong Kong follows a territorial basis of taxation. Hence, only profits which arise in or derived from Hong Kong are subject to tax in Hong Kong.

How does a Hong Kong Limited Liability Company work?

On the other hand, Hong Kong limited liability companies have a legal identity of their own, distinct from their members. This enables the company to acquire assets, go into debt, enter into contracts, sue or be sued in its own name.

Can a company in China report profits in Hong Kong?

Under section 21 of the Departmental Interpretation & Practice Notes, the Manufacturer in Hong Kong who has a contract processing arrangement with a company in China can report 50% of its profits as the earnings outside Hong Kong and not subject to Profits Tax in Hong Kong.