Hong Kong, as an international financial center, has a unique tax system. Low tax rates and simple tax systems are the magic weapons that attract global investors. But you know what? The tax system in Hong Kong actually has a lot of knowledge. Today, let’s unveil the mysterious veil of Hong Kong taxation together and explore the truth!
Ⅰ PROFITS TAX
Profits Tax is a tax levied on enterprises (including corporations,partnerships,trustees or groups) engaged in any industry, profession or business in HongKong, on income generated in or derived from Hong Kong (excluding profits from the sale of assets).
The profit tax rate for the first 2 million Hong Kong dollars of the enterprise is 8.25%, and the subsequent profits will continue to be taxed at 16.5%.
PTR DECLARATION PROCESS
1.Determine financial settlement date March 31st or December 31st every year
2.Prepare audit report according to the settlement date, No operational audit report is also required (Implemented from March 1,2023)
3.Received PTR,issued from the 1 April
4.Fill out the PTR according to the audit materials and submit it together with the audit report (to be completed within one month after receiving the tax form)
5.Received tax payment notice (if tax payment is required)
6.Tax payment
Ⅱ SALARIES TAX
Salaries tax refers to an income tax levied by the HongKong region on an individual’s income from Hong Kong.Taxpayers are individuals who obtain income by serving or being employed in Hong Kong.
The year of assessment for salary tax refers to the 12 months from April 1st to March 31st of the following year, and individuals who need to pay must declare it every year
The basic tax exemption for salariesis HKD 132000 per year. Please refer to the following figure for other tax exemption policies and tax rates.
SALARIS TAX TIME AXIS
Received tax forms from May to June
Submit tax forms from June to July
Received tax payment notice in October
the first tax payment in January of the following year
second tax payment in April of the following year
If a company or individual fails to file or pay taxes in accordance with the law, the following consequences may occur:
Fine imposed by IRD, amount of HKD 1200-10000.
Hong Kong courts issue subpoenas
Compulsory cancellation of the company
Individual or company’s main responsible persons (directors, shareholders) are restricted from entering or leaving Hong Kong
