Hong Kong features a straightforward and competitive tax system, with taxation only applying to income or profits derived from Hong Kong. The year of assessment runs from 1 April to 31 March of the following year. The system divides taxpayers into three distinct categories: individuals, businesses, and property owners.
For individuals, the standard salaries tax rate is only 15%*, with personal allowances available. For businesses, a two-tiered profits tax system applies — 8.25% on the first HK$2 million and 16.5% thereafter. Notably, Hong Kong does not impose sales tax, VAT, withholding tax, capital gains tax, estate tax, or dividend tax.
The Inland Revenue Department (IRD) makes it easy for individuals and businesses to manage their taxes through eTax. By registering with eTAX, users can access e-forms, receive tax reminders, and use the online tax calculator for simple budgeting and planning.
*First HKD 5 million of the net income will be calculated at the rate of 15%, and 16% for the portion of the exceeding net income