Hong Kong Tax Rates
Companies based in Hong Kong are not taxed on their income from foreign activity so for most Hong Kong companies the effective tax rate is 0%. Income originating in Hong Kong may be subject to tax at 16.5%. Expenses incurred by companies is tax deductible and long-term capital gains are not subject to tax.
There is no consumer tax for individuals, and the following tiered tax rates apply:
|Individual income (HK$)||Tax rate|
|0 to 40 000||2%|
|40 000 to 80 000||7%|
|80 000 to 120 000||12%|
|120 000 and above||17%|
Accounting Requirements in Hong Kong
Hong Kong accounting rules are drawn up by the Financial Reporting Standards Committee and the fiscal year runs from 1st April to 31st March. Registered companies are required to keep accurate accounts including balance sheet, profit and loss statement and appendices.
Audited financial statements must be prepared annually and these may be in English or Chinese and must be kept in Hong Kong for at least seven years.
Foreign companies must also maintain current registers of shareholders, directors, secretaries, loans and mortgages.
Relevant professional bodies include the following: the Institute of Financial Planners of Hong Kong, the Society of Chinese Accountants and Auditors and the Association of Chartered Certified Accountants HK.