Hong Kong has a simple system with low tax rates which is the major reason to attract the international business investors incorporate a company in Hong Kong. There are three taxes imposed in Hong Kong: salaries tax, profits tax and property tax. As a Hong Kong Based company, Credential helps you manage your tax obligations and ensure you pay only the amount of tax you are required to.
Hong Kong's salaries tax is among the lowest tax rates in the world. It follows a progressive tax rate system which comprises of five marginal tax brackets (2%, 6%, 10%, 14% and 17%). The progressive tax rates are charged upon an individual’s net chargeable income. It could follow the five tax percentage structures, or be charged a standard rate of 15% on an individual's net income or whichever is considered lower.
Other key features of Hong Kong’s salary tax includes:
- No capital gains tax
- No dividend tax
- No inheritance tax
- Individuals are taxed only on income which they earn in Hong Kong
- Year of assessments for taxes run from 1 April to 31 March of the following year
Corporations, partnerships, trustees and sole proprietorships in Hong Kong are chargeable to tax on all profits arising in or derived from such trade, profession or business. If the business profits are outside Hong Kong, they are not eligible for profits tax.
The details of the profits tax rates in Hong Kong are as follows:
- Unincorporated Businesses: first HK$ 2 million chargeable income is 7.5%; the remaining is 15%
- Non-Resident Entertainers and Sportsmen: 15%-16.5% flat rate
- Corporations: first HK$ 2 million chargeable income is 8.25%; the remaining is 16.5%
Property Tax is a tax paid on the owners of land and/or buildings in Hong Kong who let out their properties in return for rental income and/or other charges.
Calculating at the standard rate of 15%
From 1 April of each year to 31 March of the next year
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