The tax system under Hong Kong Inland Revenue Ordinance is relatively simple.
There are three distinct and separate headings under which tax is levied:

• Profits Tax

  Profits Tax

  • Profits tax is taxed on profits arising in or derived from Hong Kong by the company carrying on a trade, professional or business in Hong Kong;
  • Profits Tax Return is generally issued by tax authority to the company annually;
  • The current Profits Tax rate is at 16.5% on the assessable profits (i.e. Income - Expenses + / - Taxation adjustments);
  • Notice of assessment will be issued after the tax return lodged to the tax authority;
  • For tax collection purpose, company is required to pay provisional tax during the tax year based on the preceding year's tax liabilities.

  
  
• Salaries Tax

  Salaries Tax

  • Salaries Tax is taxed on an individual regarding his/her income arising in or derived from any office, employment or pension in Hong Kong;
  • The amount of tax payable is computed at the lower of i) the standard rate of 15% on chargeable income after deducting charitable donations; or ii) the applicable progressive rates on net chargeable income after the deduction of charitable donations and personal allowances.

  
  
• Property Tax

  Property Tax

  • Tax Property tax is taxed on the owner of any land or buildings or land and buildings in Hong Kong at the standard rate of 15% on the net assessable value of such land or buildings;
  • The net assessable value = Assessable value (i.e. Rental income after deduction of rates paid by the owner and irrecoverable rent) - a notional allowance of 20% of repair and maintenance.