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TAXATION OF HONG KONG

Hong Kong tax is based on the "territorial" or "source" concept.  Thus, as a general rule, Hong Kong tax is only levied on income or profit derived from Hong Kong.

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Tax Return

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  • Any company potentially liable to Profits Tax will be issued with a tax return for completion at the end of each tax year.  This should be submitted with audited accounts within one month of issue.

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Direct Taxation

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  • Hong Kong sourced income can be taxed in three ways.

  • These are Profits Tax, Salaries Tax and Property Tax

  • There is neither tax on capital gains nor any form of dividend or withholding tax.​

 

​Profits Tax

 

Profits Tax is levied on business profits under following circumstances :

  • The business is carried on in Hong Kong

  • The profits are sourced from Hong Kong

          * The applicable rates are 16.5%.

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Salaries Tax

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  • Salaries Tax is imposed on all remuneration arising from employment in Hong Kong after deduction of specific personal allowances.  It is levied on a graduated scale up to a maximum overall rate of 17%.

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Property Tax

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  • This charged on rents derived from land and buildings located in Hong Kong.  Companies are exempted from Property Tax as they are liable to pay Profits Tax on any such income.

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Indirect Taxation​

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Stamp Duty​

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  • Transfers of shares in a Hong Kong company.  The rate of duty is 0.1% each for both the transferor and the transferee. Duty is charged on the consideration or the fair market value whichever is higher.

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  • Transfers of land and buildings located in Hong Kong.  Again, duty is charged on the consideration or fair market value whichever is the higher.

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  • Stamps duty is also chargeable on leases of immovable property, transfers of units in unit trusts and on Hong Kong bearer instrument as well as on duplicates of any chargeable instrument.

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