Tel: (852) 2528 9298

2nd Floor, Jonsim Place, 228 Queen’s Road East, Wanchai, Hong Kong

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Tax Rates

Levied on profits arising in or derived from Hong Kong.

Corporations pay 16.5%
Proprietorships/Partnerships pay 15%

 

Two-tiered Profits Tax Rates Regime

 

With effect from the year of assessment 2018/19, under the two-tiered profits tax rates regime, the profits tax rate for the first $2 million of assessable profits will be lowered to 8.25% (half of the rate specified in Schedule 8 to the Inland Revenue Ordinance (IRO)) for corporations and 7.5% (half of the standard rate) for unincorporated businesses (mostly partnerships and sole proprietorships). Assessable profits above $2 million will continue to be subject to the rate of 16.5% for corporations and standard rate of 15% for unincorporated businesses.

 

Depreciation Allowance

Computer Hardware and software ( 100%)
Plant & Machinery ( 10% - 30% )

Example:

Category Initial Annual
Air Conditioning Plant/Lifts 60% 10%
Furniture and Fixture 60% 20%
Automobile 60% 30%

Leasehold Improvement: If moveable, can be regarded as furniture or fixture, otherwise, treated as part of the building and only entitled to Rebuilding Allowance.

There are exceptions to the rule. Please contact us for further details.

Example: Rebuilding Allowance on Construction Cost

Category Initial Annual
Industrial 20% 4%
Commercial - 4%

Other Considerations

 

Capital Gains

Not taxable

Dividends

Not taxable

Losses:

The tax losses may be carried forward indefinitely, subject to restrictions where change in shareholding is for the sole and dominant purpose to utilize tax losses.

Royalties

If recipient is an unconnected non-resident:
i)Proprietorships/Partnerships ~ 4.5%, otherwise ~ 15%

ii)Corporation ~ 4.95%, otherwise ~ 16.5%

Treatment of loss

 

Losses made in an accounting year are to be carried forward and set off against future profits of that business. However, it does not apply to changes in shareholding for the purpose of utilizing the tax losses.