Profits Tax

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Persons carrying on any trade, profession or business in Hong Kong, including corporations, partnerships, trustees and bodies, are subject to tax on all profits arising in or derived from Hong Kong from such trade, profession or business (excluding profits arising from the sale of capital assets).​

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Profits tax rate

                                                   First HK$2m profits     After HK$2m profits

Limited Company                                        8.25%                       16.5%

Sole Pro / Partnership                                  7.50%                       15.0%

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Basis period

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The first accounting period of a newly established company shall not exceed 18 months. Customers can choose any date as the fiscal year end date, such as March 31, June 30, December 31, etc.

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Offshore Claim

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​If certain conditions are met, the company does not need to pay Hong Kong profits tax even if it generates profits during the year.

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Profits Tax  FAQ
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Q: When should we file our profits tax return?

Answer:

Newly established companies:                  18 months after the date of establishment
Profit generated companies:                      Annually
Companies without assessable profits:      Every 3-4 years

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Q: Do we need to pay tax if no activities are carried out that year?
Answer: If the company does not make profit, it does not need to pay profits tax. Bank interest income is not subject to Hong Kong profits tax.
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Q: How is the fiscal year end date determined?
Answer: A company can choose any date as its fiscal year end date. However, we recommend "March 31" or "December 31" as the Inland Revenue Department will provide further extensions.
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Q: Is there a time limit for making up losses from previous years?
Answer: There is no time limit to make up for previous years’ losses.
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Q: Why does the Inland Revenue Department levy tax twice on the profits tax payment slip?
Answer: The tax bureau will collect next year's provisional tax as usual.
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