What Are the Different Types of Taxes in Hong Kong

Hong Kong Income Tax Calculator: Finding Out the Kinds of Taxes in Hong Kong

The income tax in Hong Kong is very easy to understand. Also, the profit taxes in Hong Kong are some of the most reasonable tax schemes in the world. Well, this article is all about that, and whatever may be your reason- maybe you are a foreigner looking to move into Hong Kong or you are a Hong Kong resident wondering about the corporate taxes, here are the types of taxes in Hong Kong.

 

Salary Tax

First comes the salary tax. Salary tax, as its name suggests is to be paid by those who work full time in Singapore and is the same for foreigners as well as residents. The salary tax depends on the income and can vary between 2% to 17%, while 15% is taken as the standard (or average). The amounts for these Hong Kong employment taxes are in Hong Kong Dollars (HKD).

As of the day this article was written, 1HKD=0.13 USD. As said previously, the salary income tax in Hong Kong for foreigners is the same as for the residents and anyone living for more than two months in the place are eligible for paying the tax. And if you are a foreigner, you might need to pay taxes in your own country, depending on where you come from.

This table here shows the salary taxes you need to pay in Hong Kong.

 

Salary Tax Table

Income	Taxes
1-40,000	2%
40,001-80,000	7%
80,001-120,000	12%
Above 120,000	17%

 

Hong Kong Corporate Tax

Another one among the types of taxes in Hong Kong is the Hong Kong corporate tax. The Hong Kong corporate tax rate used to be a flat 16.5%, but since the year of assessment 2018, Hong Kong companies need only pay 8.25% for the first HKD 2 million they make and 16.5% for anything after that. But remember, this scheme as known as the two-tiered tax system is only applicable to one office in case of related businesses. Otherwise, it again is the 16.5% corporate tax that needs to be paid by the offices in related business.

Remember that Hong Kong has a Single-Tier tax system, which means the Hong Kong Dividend tax rate is 0%. This means the corporates only have to pay taxes for the profit that was derived in Hong Kong. Also, talking about other sales tax in Hong Kong, Capital gains tax, Goods and Services Tax and Value Added Tax (VAT) have 0% rate, i.e. they need not be paid.

 

Property Tax in Hong Kong

Hong Kong property tax depends on the value of the property. The property value is estimated, and the property owners pay taxes accordingly. The standard rate is 15% of the net accessible value of the property.

 

Stamp Duty

Another one among the most asked types of taxes in Hong Kong is the stamp duty. The stamp duties in Hong Kong are of two types, fixed duty ad valorem duty. These duties might depend on the type of documents are you are transferring or processing, and the fixed duties are between HKD 3 to HKD 300 while ad valorem duty is between 0.1% to 4.25%.

 

Withholding Tax in Hong Kong

Another one of the taxes you should know about is the withholding tax in Hong Kong. The withholding tax needs to be paid by non-resident companies or individuals, who generate profit on Hong Kong by entertainment or sports. For example, singers in concert or athletes. The withholding taxes are different for individuals and corporates.

For non-resident companies are tare associates to a Hong Kong company, the rate is 16.5% of the profit they generate in a project.

• The withholding tax for non-resident companies that aren’t associates with Hong Kong company is 4.95%.
  
• Withholding tax rate for non-resident individuals is 15% and 4.5% for affiliates and non-affiliates respectively.

 

Customs Excise Duties

Importing to Hong Kong doesn’t have any duties as long as the imports are not oils, liquor or cigarettes. The Hong Kong import duty rates depend on the volume and the type of import. On the other hand, there are no export taxes in Hong Kong, which is it, another reason for entrepreneurs to look into Hong Kong as a platform to build their global business.

 

Profit Tax Returns

The Inland Revenue Department in Hong Kong collects taxes in the place, You need to download e-forms to file the tax returns, and here are the links for the forms.

For Profit Tax Returns for Companies, click here.
Find Profit Tax Returns for Individuals here.
For Profit Tax Returns for Non-Resident Individuals, click this link. 

Still got questions about the types of taxes in Hong Kong? Or do you need help filing your taxes in Hong Kong? Either way, contact us; we will be glad to help you out.