Follow Hong Kong Investment Immigration and Hong Kong Economy: Hong Kong is the freest trading port with a narrow tax base, few types of taxes, and simple tax laws. Although Hong Kong's tax system is simple, it is necessary to be familiar with Hong Kong's taxation to better manage expenses and increase revenue in Hong Kong.
※ Profits Tax
This is levied based on the assessable profits (i.e., net profit for a financial year) within the year of assessment. Any person, including corporations, partnerships, trustees, or bodies of persons, carrying on any trade, profession, or business in Hong Kong and deriving all profits arising in or derived from Hong Kong from such trade, profession, or business (excluding profits from the sale of capital assets) is subject to tax, regardless of whether they are Hong Kong residents or non-residents. Therefore, one of the essential annual tasks for any Hong Kong company is to file a Profits Tax return with the Hong Kong government. For the 2004/2005 year of assessment, the Hong Kong government set the Profits Tax rate for limited companies at 16.5% of net profit, and for unlimited companies at 15% of net profit. If a company has no business operations, incurs a loss, or generates overseas profits during the year, it is not required to pay tax.
※ Import and Export Duties
Except for tobacco, alcohol, cosmetics, and specific regulated items, other goods are exempt from import and export duties.
※ Hong Kong Salaries Tax
Any person who receives income arising in or derived from Hong Kong from any office or employment must pay Salaries Tax at a rate of 2%-20% after deducting allowable deductions (personal allowances or charitable donations). Currently, the Salaries Tax rates are divided into four tiers: 2%, 8%, 14%, and 20%. The current personal allowance is HK$100,000.