🇭🇰 Hong Kong · Tax System
Corporate tax, VAT/GST, personal income tax, capital gains, and filing obligations.
Quick answer
Hong Kong has a simple, low, territorial tax system: only Hong Kong-sourced income is taxed. Individuals pay salaries tax (with a standard-rate cap), there is no VAT, no capital gains tax and no tax on foreign income; the authority is the Inland Revenue Department.
Taxes are administered by the Inland Revenue Department (IRD). Hong Kong uses a simple, territorial tax system: profits tax on locally-sourced profits, with no VAT/GST.
- Profits tax is two-tiered: 8.25% on the first HK$2m of profits and 16.5% above (lower for unincorporated businesses).
- Tax is generally charged only on Hong Kong-sourced profits (territorial system).
- There is no VAT, GST, capital-gains or withholding tax on dividends.
Step-by-step
- 1
Understand the territorial basis
Only income arising in or derived from Hong Kong is taxed; foreign-source income, capital gains and dividends are generally not taxed.
- 2
Register with the Inland Revenue Department
You are issued a tax file; employers notify the Inland Revenue Department (IRD) when you start work.
- 3
Understand the taxes that apply
Identify salaries tax on employment income, profits tax for businesses, and property tax on rental income; there is no VAT/GST and no capital gains tax.
- 4
Note there is no monthly withholding
There is generally no monthly PAYE; you pay salaries tax after assessment, often in provisional-plus-final instalments.
- 5
File the tax return (BIR60)
File the individual tax return (BIR60) sent by the IRD each year, reporting your income and claiming allowances.
- 6
Pay, keep records and get advice
Pay the assessed tax (provisional and final), keep records, and get advice on source-of-income and the 60-day visitor rule.
Checklist
- Territorial basis understood (HK-source only)
- Tax file with the Inland Revenue Department
- Applicable taxes identified (salaries tax, profits tax, property tax; no VAT/CGT)
- No monthly PAYE — provisional + final tax
- Individual return (BIR60) filed
- Allowances claimed
- Records kept
- Advice on source-of-income / 60-day rule
Official authorities
- Inland Revenue Department (IRD)
Tax authority — profits tax, filing.
Frequently asked questions
Is foreign income taxed in Hong Kong?
No — Hong Kong taxes only income sourced in Hong Kong; foreign-source income is generally not taxed.
Is there VAT or capital gains tax?
No — Hong Kong has no VAT/GST and no general capital gains tax.
Is tax withheld monthly?
Generally no — salaries tax is paid after assessment, usually as provisional plus final tax, not via monthly PAYE.
Official-information aggregation, not legal advice. Always verify on the authority's own site.