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COUNTRY TRADING PROFILES
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Taxes - Accounting
Tax Rates |
Accounting Rules
Tax Rates
Consumption taxes
- Nature of the tax
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There is no consumption tax in Hong Kong.
- Other consumption taxes
- None
Corporate taxes
Tax rate
| Corporate Income tax |
16.5% |
| Unincorporated business Income tax |
15% |
- Tax rate for foreign companies
- Only incomes generated in HK are subjected to taxation (rate of 16.5% and 15% for unincorporated businesses).
- Capital gains taxation
- Long term capital gains are not taxed in Hong Kong.
- Main allowable deductions and tax credit
- Expenses are deductible.
- Other corporate taxes
- Stamp duties, registration fees for trading activity, taxes on occupation of landed properties.
Individual taxes
Tax rate
| Income Tax |
Progressive rate from 2% to 17% |
| From HKD 0 to 40,000 |
2% |
| From HKD 40,000 to 80,000 |
7% |
| From HKD 80,000 to 120,000 |
12% |
| More than HKD 120,000 |
17% |
- Allowable deductions and tax credit
- The allowances are meant only for persons who have chosen the progressive taxation method.
For further information on deductions, visit the website of the tax authority.
- Special expatriate tax regime
- No specific tax regime for expatriate.
Double taxation treaties
- Countries with whom a double taxation treaty have been signed
- IRD
- Withholding taxes
- Dividends: 0, Interest: 0, Royalties:4,5% / 15% (for nonresident individuals ) 4,95% / 16,5% (for nonresident companies).
- Bilateral agreement
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 We can indicate you which local taxes are applied to your product.
Accounting Rules
- Tax year
- The financial year starts on 1st January and ends on 1st April.
- Accounting standards
- Not having the force of law, the notification elaborated by the HK Public Accountants Association (Financial Reporting Standards Committee) determines the guideline to be considered for the interpretation and application of the accounting principles and which should be followed in this regard by the members of the profession.
Hong Kong Accounting Standards (HKAS)
- Accounting regulation bodies
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HK Institute of Certified Public Accountants
- Accounting reports
- BALANCE SHEET: on December 31 n, to be compared December 31 n-1 FIXED ASSETS CURRENT ASSETS Stocks Marketable securities Debtors Cash CURRENT LIABILITIES Obligations under finance leases Proposed dividends Taxation Creditors Loans and bank overdrafts NET CURRENT ASSETS LONG TERM LIABILITIES Deferred taxation Obligations under finance leases Bank loans SHAREHOLDERS EQUITY Share capital Reserves Retained profits PROFIT AND LOSS ACCOUNT: 1) Turnover 2) Profit before tax 3) Tax 4) Retained profits at the beginning of the fiscal year 5) Dividends 6) Retained profits at the end of the fiscal year.
- Publication requirements
- Annual Publication.
- Professional accountancy bodies
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The Institute of Financial Planners of Hong Kong
The Society of Chinese Accountants and Auditors
Association of Chartered Certified Accountants HK
- Certification and auditing
- Companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organization. You can contact KPMG, Ernst&Young, Pricewaterhouse coopers.
- Accounting news
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Accounting news in HK
© Export Entreprises SA, all rights reserved.
Last updates: February 2012
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