Asia-Pacific · Tax guide
Hong Kong
Hong Kong taxes only profits sourced in Hong Kong, at 8.25% on the first HK$2,000,000 and 16.5% above for companies. There is no VAT, GST or sales tax, and no tax on dividends or most capital gains. Large groups pay a minimum top-up tax. Taxes are administered by the Inland Revenue Department (IRD).
At a glance
- Profits tax
- 16.5%
- Unincorporated businesses
- 15%
- VAT / GST
- None
- Royalties paid abroad
- 4.95% (16.5% if paid to an associate)
- MPF
- 5% of relevant income, capped at HK$1,500 a month
- Minimum top-up tax
- 15%
8.25% on the first HK$2,000,000
Standard rate
No sales tax of any kind
Effective rate
Employer contribution
Large multinational groups
Profits tax
Hong Kong taxes only profits arising in or derived from Hong Kong. Corporations pay 8.25% on the first HK$2,000,000 of assessable profits and 16.5% above; unincorporated businesses pay 15% at the standard rate. Only one company in a group can use the lower tier.
Returns are usually issued in April and filed with audited accounts; provisional tax for the next year is paid in advance.
No VAT or sales tax
Hong Kong has no VAT, GST or general sales tax, and no tax on dividends. Every business must hold a valid Business Registration Certificate.
Employers
Employers enrol staff in a Mandatory Provident Fund scheme and contribute 5% of relevant income, capped at HK$1,500 a month, and file the employer's return each April.
Payments abroad, FSIE and top-up tax
There is no withholding on dividends or interest. Royalties paid to non-residents are taxed at an effective 4.95% (16.5% if paid to an associate), withheld by the payer.
Under the foreign-sourced income exemption (FSIE) regime, foreign dividends, interest, disposal gains and IP income received in Hong Kong by group companies are taxable unless substance or participation conditions are met. Groups with revenue at the global minimum tax threshold pay Hong Kong's minimum top-up tax to reach 15%. Businesses with revenue up to HK$400,000,000 (and one other small-size test) can be exempt from transfer pricing master and local files.
Key dates
- AprilEmployer's return (BIR56A) and profits tax returns issued
- One month after issue (extensions available)Profits tax return filing
- Every one or three yearsBusiness Registration renewal
Figures and sources
8 figures- Corporate rate on the first HK$2 million of assessable profits (two-tiered rates)8.25%Checked against the official source
- Assessable profits taxed at the lower two-tier rateHK$2,000,000Checked against the official source
- Profits tax rate for corporations16.5%Checked against the official source
- Standard profits tax rate for unincorporated businesses15%Checked against the official source
- Effective tax on royalties paid to non-residents4.95% (16.5% if paid to an associate)Under professional review
- Employer MPF contribution5% of relevant income, capped at HK$1,500 a monthChecked against the official source
- Hong Kong minimum top-up tax rate15%Checked against the official source
- Revenue at or below which a business may be exempt from master and local files (with one other size test)HK$400,000,000Checked against the official source
Indicative only. This assessment is a high-level overview of tax obligations in Hong Kong based on the information you provided and rules in force for 2026. It is not tax or legal advice. Consult a qualified tax adviser in Hong Kong (a Hong Kong CPA or tax adviser) before making compliance decisions.