๐ญ๐ฐ Tax Overview โ Hong Kong
Corporate tax, VAT/GST, and key tax information for businesses operating in Hong Kong.
Tax Treatment by Structure
Private Limited Company (Ltd)
Hong Kong operates a territorial tax system. Only profits sourced in Hong Kong are subject to profits tax. The two-tier rate applies: 8.25% on the first HKD 2 million of assessable profits, and 16.5% on the remainder. There is no VAT or GST, no capital gains tax, no withholding tax on dividends or interest paid to non-residents, and no estate duty. Companies must file an annual Profits Tax Return and are required to have their accounts audited by a Hong Kong CPA.
Branch Office (Branch)
A branch office is taxed on the same territorial basis as a Hong Kong-incorporated company. Only profits arising in or derived from Hong Kong are subject to profits tax at the standard two-tier rate (8.25% on the first HKD 2 million, 16.5% thereafter). The branch must maintain proper books of account, file a Profits Tax Return annually, and may be required to have its Hong Kong accounts audited. Transfer pricing rules apply to transactions between the branch and its parent company.
This content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.