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Introduction to taxation system in Hong Kong

 Hong Kong Tax Table 
2018 - 2019
  • Incorporated - 16.5%
  • Unincorporated - 15%
Standard Tax rate
Before personal allowance
  • Net assessable 15 %
Progressive tax rates
After personal allowance
    • First $40K - 2%
    • Next $40K - 7%
    • Next $40K - 12%
    • Remainder - 17%
  • Basic:- $132K
  • Married:- $264
  • Single Parent:- $120K
  • Child 1-9 child on birth year $120K after:- $120K
  • Dependent age 60-up:- $38K
  • Dependent:- age 55 to-59:- $25K
  • Dependent below:- 25 - $50K
  • Disable dependent:- $50K
  • Self-education expenses:- $100K
  • Home loan interest (max. for 15 years) $100K
  • Elderly residential care expenses
  • Contribution to recognized retirement schemes:-$18K
  • Approved charitable donations:- 35% of assessable income.
  •  15% on the net assessable value
Stamp duty
  • Stamp duty for shares transfer 2%
  • Stamp duty for real estate property transfer between 1.5% - 4.25%
    • Non-Hong Kong resident required to pay  double stamp duty for real estate since 23 Feb. 2013
Hong Kong has the right to maintain an independent taxation system free ofinterference from China government until the year 2047. The first Inland Revenue Ordinance was enacted on 3 May 1947 to impose a tax on earnings and profits and intent continues to exist.

Hong Kong has threetypes of separate taxes "territorial principal" based – profits tax,salaries tax, and property tax on profits and income sourced in onlyHong Kong.
 
Profits tax is charged oncorporations, partnerships, joint ventures, trustees, individuals, andunincorporated bodies of persons carrying on business in Hong Kong.
 
Salaries tax is imposed on individuals who derive Hong Kong sourced income from an employment. 

Property tax in imposed on the owners of real estate (home or office) on the rentearned from the letting (renting) their properties. If a corporate body(a company) earns income by letting or subletting of its property inHong Kong, such income can be chargeable to profit tax not to propertytax.

Tax liability in Hong Kong

Sole proprietors, partnerships are subject to profit tax of 15% and 16.5% profit tax charged on corporations.
Hong Kong does not impose tax on capital gains, sales or value added tax anddividends.
  Some non-residents such as entertainers or sportsmen visiting Hong Kong for performing may required to pay tax."

Double Taxation Avoidance Treaty

The objective of double taxation agreements between two countries is toavoid profits or incomes earned in one country and paid to entities ofanother country from being taxed more than once.

The government of HongKong is now entering into an increasing number of tax treaties ofvarious types. So far Hong Kong government has signed 49 comprehensivedouble taxation avoidance treaties, 40 of them are in force andremaining awaiting ratification. 
 
See below links for more details

 
40 of double taxation avoidance treaties are in force  see below link for : 
 
 
If you have any further question, please don't hesitate tocontact us.
 
 
 
 
 
 
 
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