Profits Tax
Tax Rates
Levied on profits arising in or derived from Hong Kong.
Corporations pay 16.5%
Proprietorships/Partnerships pay 15%
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% iii)Charitable Donation: Limited on 35% of assessable Profits. |
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