Hong Kong Corporate Taxes 2023-07-03T16:27:23+00:00

Hong Kong Corporate Taxes

THE SCF GROUP HAS BEEN FORMING AND MANAGING HONG KONG COMPANIES FOR OVER 25 YEARS

CORPORATE & INDIVIDUAL TAX RATES 2023

TAXATION OF HONG KONG COMPANIES

The key benefit of Hong Kong for those conducting business outside of the territory is that it employs a territorial tax system which in effect means that only profits generated from within the territory are subject to the local corporate tax rate of 16%. Hong Kong operates a well-run tax system and that by convention the authorities expect to see taxes paid on around 25% of declared profits or, in other words, if based on the standard 16% corporate tax rate, a mere 4% annual corporate tax if a business is really conducted outside of Hong Kong! It should be emphasized that not to pay such taxes can expose a trading company both to considerable fines and negate the protection that is afforded from 3rd party countries — i.e. normally the country of the beneficial owners fiscal residence – by being able to show that there is a real trading company being operated from Hong Kong, carrying on real business and paying local taxes. Unlike many Far-Eastern countries Hong Kong employs and enforces international accountancy standards, which are very similar to those in the United Kingdom.

TAXATION OF HONG KONG RESIDENT INDIVIDUALS

In Hong Kong this is known as the Salaries Tax and as its name implies it only applies to employment income and not dividend or capital gains receipts. The rates of taxes start at only 2% on employment income but cannot go beyond 16% and that is before tax credits are taken into account. All in all, Hong Kong is a very favorable personal tax location.

BASIC FACTS: In synopsis, the corporate tax rate in Hong Kong is as follows:

STANDARD COMPANY RATES OF TAX

16% Corporate Tax on profits earned within Territory

Zero Corporate Taxes on profits earned outside of Hong Kong

For more information on Hong Kong Company Formation services, please speak to a tax planning consultant

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    The SCF International  specializes in providing accountancy and management services for UK and Irish limited companies, UK & Irish company management services including the provision of (where necessary) domestic directors, domestic company secretaries, registered office address services, trading offices, value added tax (VAT) registration and management, payroll (Pay as You Earn PAYE), opening up and managing UK or Irish bank account facilities, raising  invoices and any and/or all other services required to establish a bone fide managed and controlled UK or Irish limited liability company.

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