Hong Kong Tax Overview

Hong Kong tax system at a glance

Hong Kong operates a simple, low-rate, territorial (source-based) tax system administered by the Inland Revenue Department under the Inland Revenue Ordinance (Cap. 112). Only income/profits arising in or derived from Hong Kong are taxable; there is no VAT/GST, no capital gains tax, and no withholding tax on dividends or interest.

• Tax authority — Inland Revenue Department (IRD) (Inland Revenue Ordinance (Cap. 112))
• Currency — Hong Kong Dollar (HKD) (Inland Revenue Ordinance (Cap. 112))
• Year of assessment — 1 April to 31 March (the 2024/25 year runs 1 April 2024 to 31 March 2025) (Inland Revenue Ordinance (Cap. 112))
• Basis of taxation — Territorial (source-based) — only income/profits arising in or derived from Hong Kong are chargeable; foreign-source income is generally not taxed (Inland Revenue Ordinance (Cap. 112))
• Main direct taxes — Profits tax (business profits), salaries tax (employment income), and property tax (rental income) — there is no comprehensive personal income tax (Inland Revenue Ordinance (Cap. 112))
• Headline salaries tax (progressive) — Progressive rates of 2%, 6%, 10%, 14%, 17% on net chargeable income (each band HKD 50,000) % (Inland Revenue Ordinance (Cap. 112), Schedule 2)
• Headline salaries tax (standard rate cap) — Two-tiered standard rate: 15% on first HKD 5,000,000 of net income, 16% above — whichever produces lower tax than progressive applies % (Inland Revenue Ordinance (Cap. 112))
• Headline corporate profits tax — Two-tiered: 8.25% on first HKD 2,000,000 of assessable profits, 16.5% above (corporations) % (Inland Revenue Ordinance (Cap. 112), Schedule 8)
• VAT / GST — None — Hong Kong has no VAT, GST or sales tax (Inland Revenue Ordinance (Cap. 112))
• Capital gains tax — None — Hong Kong does not levy capital gains tax (Inland Revenue Ordinance (Cap. 112))
• Profits tax return filing — Returns issued in bulk on the first working day of April; due ~1 month from issue, with block extensions by accounting-date code (extended dates commonly Nov for 31 Dec year-ends, mid-Aug for 31 Mar year-ends) ((approx — confirm)) (Inland Revenue Ordinance (Cap. 112), section 51)
• Individual tax return filing — Individual tax return (BIR60) issued early May; due within 1 month of issue (3 months if filed for sole-proprietorship business), with a 1-month extension for e-filing ((approx — confirm)) (Inland Revenue Ordinance (Cap. 112), section 51)