{"id":9118,"date":"2018-11-27T09:54:57","date_gmt":"2018-11-27T01:54:57","guid":{"rendered":"https:\/\/zegal.com\/?p=9118"},"modified":"2023-02-27T15:29:52","modified_gmt":"2023-02-27T07:29:52","slug":"corporate-tax-hk","status":"publish","type":"post","link":"https:\/\/zegal.com\/en-gb\/blog\/post\/corporate-tax-hk\/","title":{"rendered":"The Guide to Hong Kong Corporate Tax Rate [Updated]"},"content":{"rendered":"

So, you\u2019ve decided to set up your business in Hong Kong. What\u2019s not to love about it? With its proximity to the mainland Chinese market and strong government support for innovation, it has emerged as one of the preferred locations for a number of global enterprises. <\/span>You\u2019ve gone through all the basic paperwork and you\u2019re wondering what\u2019s next for Setting Up A Company in Hong Kong<\/a>. Taxes are the answer. A daunting task for some, this guide will take you through the important corporate tax regime in Hong Kong.<\/span><\/p>\n

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It might ease your mind a little to first know that Hong Kong generally has a highly attractive hong kong tax regime like profit tax stamp duty in Hong Kong<\/a> , with low personal and corporate tax rates. In this post, we\u2019ve broken down the essential Hong Kong taxes you have to take note of as you go about establishing your business in Hong Kong.<\/span><\/p>\n

<\/span>What is the corporate tax rate in Hong Kong?<\/span><\/h2>\n

The straightforward answer to this is 16.5% on all assessable profits made by a company annually. However, there are different tiers and classifications of tax rates that businesses owners should be aware of! Read on to find out more.<\/p>\n

<\/span>What corporate taxes must I pay as a business owner in Hong Kong?<\/span><\/h2>\n

Companies have to pay what is known as profit tax in Hong Kong <\/strong>at a rate of <\/span>16.5% of their assessable profits<\/span><\/a>. Such a corporate tax rate in Hong kong  is considered low when compared against other economic powerhouses in. In Japan for example, the corporate tax rate is <\/span>31%<\/span>, and in South Korea, it is <\/span>22%<\/span>.<\/span><\/p>\n

In addition to this, companies do not have to pay capital gains tax. Jargon aside, this can be plainly understood to mean a taxation on gains your business makes from the sale of stocks, bonds, precious metals and property, amongst other assets.<\/span><\/p>\n

Furthermore, businesses do not have to pay value added taxes, or sales taxes. There is also no withholding tax on dividends and interest that are imposed on companies, and no collection of social security benefits. What this means is that dividends from local companies chargeable to tax are exempt from these. On the other hand, it should also be noted that dividends from overseas companies are generally offshore in nature and not subject to tax in Hong Kong.<\/span><\/p>\n

<\/span>Who is liable for paying Profits Tax in Hong Kong?<\/span><\/h2>\n

According to the Inland Revenue Ordinance (IRO), a person is liable to pay Hong Kong Profits Tax if the <\/a><\/span>following conditions<\/span> are met: <\/span><\/p>\n