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Hong Kong Tax: A Beginners Guide

Hong Kong Tax the Basic Facts


New Zealand Player Heading For a Try

New Zealand at the 2006 Hong Kong Sevens

Hong Kong Rugby Board

One of the most common questions about the worlds ‘freest economy’ is whether it truly has no tax. Although this is untrue, Hong Kong tax is extremely low.

As it is, you'd need a team of sniffer dogs to try and find a tax in Hong Kong - with no sales tax, no capital gains tax, no VAT and plans in the pipeline to phase out stamp duties, the people are less than enthusiastic about direct taxation. Income tax, or salary tax as it is known, is set at 2% for those earning less than HK$35,000 a year, 8% for HK$35,000-HK$70,000, 14% for HK$70,000-HK$105,000 and 20% for anything exceeding that.

This low level of taxation brings Brits, Aussies and Americans by land, sea, air and camel to escape their native countries' tax regimes, contributing to Hong Kong's internationalism. Similarly, corporate tax, (or profits tax as it is known), is set at the bargain rate of 16% of assessable profits.

All in all, the government gets it hands on very little money through direct taxation. This allows SMEs to flourish and encourages would-be entrepreneurs to throw their hat into the business ring.

Hong Kong Tax:

  • No sales tax
  • No capital gains tax
  • No VAT
  • Maximum salary tax of 20%
  • Profit tax maximum of 16%
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