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Hong Kong Profits Tax
is one of Hong Kong companies' basic taxes. It is territorial in nature and
only profits which are deemed to have, a Hong Kong source are subject to
Profits Tax. If a Hong Kong company does not carry on business in Hong Kong or
if it income is generates outside of Hong Kong is not subject to Hong Kong tax
(offshore status application).
Basic Requirements for Hong Kong Profits Tax
To be liable to Hong
Kong Profits Tax, a company must meet three basic tests as set out by the Privy
Council in the Hang Seng Bank case. These tests are:
1. The company must be
carrying on a trade, profession or business in Hong Kong;
2. The company must be
generating profits from that trade, profession or business of a type which are
subject to Profits Tax, for example, trading profits or commission as opposed
to non-taxable capital gains or dividends; and
3. Those profits must
have a Hong Kong source.
Hong Kong Profits Tax Rate
The current profits
tax rate is 16.5% on assessable profits. All companies are subject to the same
profits tax rate irrespective of their residential status.
Hong Kong Tax Return
Hong Kong Tax Return
is refers to the reports filed with the department of the Hong Kong Inland
Revenue Department containing information used to calculate the taxes and
declare liability for taxation. Tax returns are generally prepared using forms
prescribed by the tax authority.
Hong Kong Tax Return Requirements and Deadlines
The IRD of Hong Kong
generally issues the corporate profits tax returns on the 1st of April every
year. Normally, profits tax return should be filed within 1 month from the date
of issue. The company has to file and complete the tax return together with the
following supporting documents:
1. A certified copy of
the Balance Sheet, Auditor’s Report and Profit & Loss Account pertaining to
the basis period.
2. A tax computation
with supporting schedules showing how the amount of Assessable Profits (or Adjusted
Loss) has been arrived at.
3. Other documents and
information as specified in the Notes and Instructions of the profits tax
return.
Hong Kong is an ideal
jurisdiction in which to incorporate a company with generates profits outside
of Hong Kong. Hong Kong is officially a low tax jurisdiction which provides
simple, certain and straight forward legislation. With proper planning, Hong
Kong company which income is generates outside of Hong Kong is not subject to
Hong Kong tax (offshore status application).
Contact us
If you have further queries, please contact Tannet
24 hours Malaysia hotline：603-21418908;
24 hours Hong Kong hotline：852-27837818;
24 hours Hong Kong hotline：86-755- 36990589;
Email: mytannet@gmail.com
TANNET GROUP : http://www.tannet-group.net, http://en.tannet.com.my