Characteristics 	Portfolio Content 	
General 	
Revenue authority 	Inland Revenue Department (Section IV.A.)  	
Type of tax system  	Territorial system: only Hong Kong-source income is within the charge to tax. (Sections V.A., V.B.1., V.C.1. and V.D.1.) Since January 1, 2023, certain types of foreign-source passive income received in Hong Kong by a constituent entity of a multinational group can be regarded as Hong Kong-source income (subject to exemptions) and therefore as assessable in the year in which it is received (FSIE regime: Section VI.L.)	
Residence  	Residence generally has little significance for Hong Kong tax purposes (except in a treaty context): under Hong Kong’s territorial system, both residents and non-residents are taxable (in generally the same manner) only on their Hong Kong-source profits. (Section V.A.) Residence may have relevance for particular purposes (e.g., salaries tax – see Section IX.A.)

Where residence is in issue, for corporations the determinative factors may include whether a corporation is incorporated in Hong Kong or, if not, whether it is centrally or effectively managed or controlled from Hong Kong depending on the treaty; for individuals, a presence test applies, based on whether one ‘ordinarily resides’ in Hong Kong or, alternatively, has stayed in Hong Kong more than 180 days in the tax year concerned or more than 300 days in two consecutive tax years one of which is the relevant year of assessment. 
	
Basic domestic nexus rule for foreign corporations  
 	Under Hong Kong’s territorial system, foreign corporations, like domestic corporations, are subject to Hong Kong profits tax on their Hong Kong-source profits from a trade, profession or business carried on in Hong Kong (excluding profits arising from the sale of capital assets) and subject to exemption. (Section V.D.2.).	
Treaty network 	Hong Kong has tax agreements with nearly 50 jurisdictions, not including the United States, that generally follow the OECD Model Convention. (Section XVI.A.)  

MLI signatory: Yes. (Section XVI.C.) 

For the texts and status of Hong Kong’s tax agreements, see International Tax Treaties. 	
Corporations 	
Corporate income tax rate 
 	The standard rate is 16.5%, but a rate of 8.25% applies on the first HK$ 2 million profits (applies only to one entity nominated within a group of entities to be charged at the two-tiered rates). (Section V.D.7.)	
Withholding tax rates on payments to non-resident companies 	Dividends: 0% (Section V.D.4.c.)  

Interest: 0% (Section V.D.7.c.)   

Royalties: Generally, 4.95% (unrelated party – based on the standard profits tax rate applied to 30% of the gross royalties) or 16.5% (related party) (Section V.D.7.c.). 

For the rates of source country taxation applying under Hong Kong domestic law and tax treaties and the context for their application, see the Withholding Tax Chart. 	
Net operating losses carryback/forward 	Carryback: No.  
Carryforward: Indefinitely. (Section V.D.5.h.(1)) 	
Restrictions on deductibility of interest expenses  	There are no thin capitalization rules, but there are limitations placed on the deductibility of interest expenses in certain circumstances. (Section V.D.5.i.)	
Anti-hybrid mismatch rules 	An anti-hybrid rule denies the dividend participation exemption for purposes of the FSIE regime where the dividend is deductible for the paying corporation. (Section VI.L.4.b.) 	
Incentives (major)) 	•	R&D: Yes. (Section II.E.2.d., Section V.I.4., and Section X.B.4.c.)
•	Patent box: Yes. (Section VI.L.)
•	Enhanced depreciation / capital allowance: Yes. (Section V.D.5.h.)
•	Environmental: No.
•	Other: Special concessions for insurers, financial services, aviation/shipping, treasury operations, and family offices. (Sections VI.C. to J.)	
Participation exemption (or similar regime) 	Yes, there are limited exemptions to the FSIE regime for certain types of foreign-sourced interest, dividends, and disposal gains subject to requirements on economic substance, participation, or nexus. (Section VI.N.4.)     	
Tax consolidation 	No. 	
M&A regime 	•	Tax-free or tax-privileged transaction: Yes. (Section VI.M.)
•	Stamp duty/share transfer taxes: Transfers or sales of Hong Kong property and transfers of non-exempt shares in Hong Kong companies are subject to stamp duty. (Section XI.A.)  
•	Limitation on pre-deal NOL carryforwards: No limitation on losses acquired in share deals. (Section VI.M.2.)   	
OECD Pillars One and Two 	Hong Kong has agreed to implement the Two Pillar Solution. (Section XV.B.) 	
Controlled foreign company regime 	No. 	
Transfer pricing regime 	Yes. (Section VII.D.)  

Country-by-country report: Yes. (Section VII.D.1.)  
See also Chapter 70 of 6955 T.M., Transfer Pricing: Rules and Practice in Selected Countries (H–I).  	
General anti-avoidance rule 	Yes. (Section X.F.2.)	
Mandatory disclosure regime 	No. 	
Foreign tax relief  	Relief may be granted unilaterally: by way of a deduction, in certain circumstances; or under the terms of a tax treaty: by way of a credit. (Section XVI.B.) 	
Individuals 	
Personal income tax rates  	Lower of: 
(i)	the standard rate on net income (before deduction of allowances) at 15% on the first HK$ 5,000,000 and 16% on the remainder; and 
(ii)	(ii) the progressive rates on net chargeable income, at 2%, 6%, 10% and 14%, based on increments of HK$ 50,000, and 17% on net chargeable income above HK$ 200,000. (Section V.C.9.) 	
Equity incentives 	Yes. (Section V.C.3.)	
Foreign tax relief 	Yes. (Section XVI.B.)  	
Wealth tax, estate/inheritance taxes, gift tax 	•	There is no net worth or wealth tax in Hong Kong.  (Section IV.B.8.) 
•	There is no estate tax, inheritance tax, or gift tax in Hong Kong. (Sections IV.B.2. and XIII.A.)	
Exit tax 	No.  	
Other Taxes 	
VAT/GST/Sales tax 	No. (Section IV.B.4.)	
Digital services tax  	No.  	
Local taxes  	Generally, none, but property tax is assessed on owners of land or buildings on a net assessable value basis and ad valorem stamp duty is charged on real estate sales, transfers, and leases, and on transfers of Hong Kong stock. (Section V.B. and Section XI.A. and D.) 	
Administrative 	
Standard tax return filing dates  	Corporations: generally issued at the start of April each year and must be filed within one month thereafter.

Individuals: generally issued at the start of May each year and must be filed within one month thereafter. (Section X.A.)	
Limitations period for assessment 	•	Up to six years from the end of the relevant tax period;
•	Up to 10 years where fraud or willful evasion is involved.  
(Section X.F.1.) 	
Advance tax rulings  	Yes. (Section X.F.2.)