Tax & International Structuring in Hong Kong

Essentials guide · Source-checked research88% of statements checked against a source43 checked against an official source0 checked against a secondary sourceChecked 2026-10-196 held back until checked against an official source1 topic includes AI-written statements, not source-checkedNot yet professionally reviewed

• Corporations pay profits tax at 8.25% on the first HK$2,000,000 of assessable profits and 16.5% on the remainder.

  Two-tiered rates from year of assessment 2018/19; unincorporated businesses pay 7.5% and 15%.Inland Revenue Department, HKSAR Government · checked 2026-10-19

• Profits tax is charged only on profits arising in or derived from Hong Kong, and no tax is levied on profits arising abroad even if they are remitted to Hong Kong.

  Source rules are fact-specific; the foreign-sourced income exemption regime applies to certain passive income received by multinational group entities.Inland Revenue Department, HKSAR Government · checked 2026-10-19

• Hong Kong has no sales tax or VAT and no withholding tax on dividends and interest.

  Royalties paid to non-residents are treated differently (see hk-tax-004).Invest Hong Kong (InvestHK), HKSAR Government · checked 2026-10-19

• Sums received by a non-resident for the use of patents, trade marks, copyright material and similar rights in Hong Kong are deemed Hong Kong-sourced, and the payer must deduct the tax when making the payment.

  Royalties and similar payments to non-residents; the effective rate depends on the recipient's circumstances and was not stated on the page.Inland Revenue Department, HKSAR Government · checked 2026-10-19

• Hong Kong applies a 15% global minimum tax through an income inclusion rule and the Hong Kong minimum top-up tax for fiscal years beginning on or after 1 January 2025; the undertaxed profits rule is not yet in effect.

  Multinational groups with annual consolidated revenue of EUR 750 million or more in at least two of the four preceding fiscal years. Enacted by the Inland Revenue (Amendment) (Minimum Tax for Multinational Enterprise Groups) Ordinance 2025 on 6 June 2025. Top-up tax notification is due within six months after the fiscal year end.Inland Revenue Department, HKSAR Government · checked 2026-10-19

• An entity is exempt from preparing transfer pricing master and local files if it meets any two of: revenue not over HK$400 million, total assets not over HK$300 million, and not more than 100 employees; otherwise the files are due within 9 months after the accounting period ends.

  Separate related-party transaction thresholds exempt specific categories from the local file; IRO section 58C.Inland Revenue Department, HKSAR Government · checked 2026-10-19

Read the full guide: Tax, accounting and reporting