A guide for taxpayers in Hong Kong

Hong Kong, known for its low tax rates and straightforward tax system, offers a simple and streamlined tax process for taxpayers. In Hong Kong, taxes are charged based on a year of assessment — a 12-month period running from 1 April to 31 March of the following year. Whether you are a first-time filer or need a quick refresher, this guide will walk you through Hong Kong’s general tax information, including taxpayer types, filing methods, and payment options.

Taxpayer categories

Talent working in Hong Kong should report their tax liabilities to the tax authority of Hong Kong, the Inland Revenue Department (“IRD”), on the appropriate tax return(s). Each type of taxpayer comes with its own set of rules and requirements, so pay attention to where you fit in:

1. Individuals
   You should report all income from employment (including income from office and pension), profits from sole proprietorship businesses, and rental income from solely owned properties through the Tax Return – Individuals (Form BIR60) if you:
   • Earn total salary income in Hong Kong more than $132,000 for single or $264,000 for married couple and/or
   • Have letting income from wholly owned property/ profits from wholly owned business in Hong Kong
   Tax payable is calculated at progressive rates (i.e. first $50,000 at 2%, next $50,000 at 6%, next $50,000 at 10%, next $50,000 at 14% and remainder at 17%) on your net chargeable income or at standard rate (i.e. first $5,000,000 at 15% and remainder at 16%) on your net income (before deduction of the allowances), whichever is lower.
    
2. Businesses
   You should report your profits through Corporations (Form BIR51), Persons Other Than Corporations (Form BIR52), or In Respect Of Non-Resident Persons (Form BIR54) of Profits Tax Return if you fulfil one or more of the following:
   • Carry on a trade, profession or business in the form of a corporation and partnership
   • Have a non-resident person who is chargeable to Profits Tax in your name
   Prevailing Profits Tax rates are 15% for unincorporated business including sole-proprietorship, joint-venture and partnership carried on by individuals and 16.5% for corporations. Where two-tiered profits tax rates are elected, the tax rates would be halved (i.e. 7.5% or 8.25%) of the assessable profits up to $2,000,000 and 15% (unincorporated businesses) or 16.5% (corporations) on any part of assessable profits over $2,000,000. 
    
3. Property owners
   You should report income from property jointly owned or co-owned by yourself with other person(s) (including corporation and body of persons) through the Property Tax Return (Form BIR57). To report income from property held by corporations or bodies of persons, you have to complete Property Tax Return (Form BIR58).
   If you are the sole owner of the property, you should report your rental income through Form BIR60. 
   Property tax is computed at the standard rate of 15% on the net assessable value of the property (i.e. assessable value less rates paid by owner and statutory allowance for repairs and outgoings) for the relevant year of assessment.

Steps and timeline to file tax return

The IRD maintains an annual schedule for tax return issuance: profits tax and property tax returns are normally distributed on the first working day of April, followed by Form BIR60 normally on the first working day of May. Upon receiving a tax return from the IRD, you are required to:

• Complete the tax return, along with any appropriate supplementary forms 
• If you are entitled to claim any allowances, such as child allowance, married person’s allowance and etc., you are required to claim it on your Form BIR60
• Generally, tax return should be filed within 1 month from the date of issue of the return

As a smart city, Hong Kong enables taxpayers to file tax return(s) through the eTAX platform, which is a convenient option for managing your tax affairs and communicating with the IRD anytime and anywhere. You can also calculate your tax liability under salaries tax or personal assessment by using a simple Tax Calculator developed by the Inland Revenue Department.

To ensure a smooth tax filing experience, remember to submit your returns on time. This helps you avoid additional charges and maintain good standing with the IRD.

Payment made easy with flexible tax payment methods

When it comes to paying your taxes, Hong Kong offers multiple convenient options:

Taxpayers in Hong Kong

Taxpayers in Hong Kong may settle their taxes through electronic or non-electronic means: 

• Electronic: 
  • Telephone
  • The Internet (e.g. e-Cheque and PPS)
  • Bank ATM
• Non-electronic
  •  By post 
  •  In-person (collection points)

Taxpayers from overseas

Taxpayers from overseas may settle their taxes through the following methods if they:

• Have a bank account in Hong Kong: 
  • Crossed cheque
  • The Internet (online banking)
• Do not have a bank account in Hong Kong:
  • Bank draft
  • Crossed cheque in overseas account 
  • Arranged Payment in Hong Kong through Related Party

Understanding the tax system allows sufficient time for you to file tax returns and pay your taxes in Hong Kong. Those with follow-up inquiries should refer to the IRD website for further details.