Hong Kong Taxation
Profits Tax
Persons which include corporations, partnerships, trustees, and bodies of persons carrying on any trade, profession, or business in Hong Kong, are chargeable to tax on all profits (excluding profits arising from the sale of capital assets) arising in or derived from Hong Kong (such as from trade, profession or business). There is therefore no distinction made between residents and non-residents. No tax is levied on profits arising abroad, even if they are remitted to Hong Kong.
| Details | 2024/2025 | 2023/2024 | 2022/2023 | 2021/2022 |
| Corporation and its unincorporated business | 16.5% / 8.25%* | 16.5% / 8.25%* | 16.5% / 8.25%* | 16.5% / 8.25%* |
| Individuals / Unincorporated | 15% / 7.5%* | 15% / 7.5%* | 15% / 7.5%* | 15% / 7.5%* |
From 2003/04, trading profits and interest income from qualified debt instruments with a maturity period of seven years or more are exempted from profits tax. Those with a maturity period from three to less than seven years are eligible for a 50% concession on profits tax.
For sums such as royalties to a non-resident person, 30% are deemed as assessable profits under Section 21A(1)(b) of the Inland Revenue Ordinance.
Persons who pay or credit such sums to non-resident persons are required to deduct from such sums, sufficient amounts to settle the tax due to the IRD. Doing so may save the trouble of recovering the tax difference from the recipients at a later date.
*Profits tax rate for the first HK$2 million of profits of corporations / unincorporated business will be lowered to 8.25% / 7.5%.
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