Tax Planning & General Advisory in Hong Kong
Pay the tax you owe — and not a dollar more. We help founders and international groups structure their Hong Kong business efficiently, support offshore profits claims and keep every filing on time, within the law and with full transparency.
Why tax planning matters in Hong Kong
Hong Kong has one of the simplest and most competitive tax systems in the world: a two-tier profits tax of 8.25% and 16.5%, no VAT, no tax on dividends or capital gains, and tax only on profits sourced in Hong Kong. But a low headline rate does not mean zero obligations — and it does not guarantee the best result for your business.
The outcome depends on how your company is structured, where its operations actually take place, how income flows between related entities and how well every position is documented. The territorial principle, the offshore claims process, the foreign-sourced income exemption (FSIE) regime and the double tax agreement network all reward careful planning — and penalise improvisation.
Intergroup combines tax planning with practical corporate advice. We look at your business as a whole — structure, substance, banking, accounting and filings — and give you clear, written recommendations you can act on. Legitimate planning only: every solution we propose is built on real commercial substance and Hong Kong law.
profits tax on the first HK$2 million of assessable profits
tax on dividends and capital gains, and no VAT or GST
comprehensive double tax agreements signed (as of September 2026)
minimum period for keeping business records
Get tax advice
Tell us about your company, where you do business and what you want to achieve — we will outline the key tax points and next steps.
+852 5803 1008Hong Kong taxes at a glance
A quick reference to the main taxes and rates that affect companies, owners and employees in Hong Kong.
| Tax | Rate | What you should know |
|---|---|---|
| Profits tax — companies | 8.25% / 16.5% | 8.25% on the first HK$2 million of assessable profits and 16.5% on the rest. Only one entity in a group of connected entities can use the lower tier. |
| Profits tax — unincorporated businesses | 7.5% / 15% | The same HK$2 million threshold applies to sole proprietorships and partnerships. |
| Salaries tax | 2%–17% | Progressive rates on net chargeable income, capped by the standard rate: 15% on the first HK$5 million of net income and 16% above it. You pay whichever is lower. |
| Property tax | 15% | Charged on the net assessable value of rental income from Hong Kong property. |
| Tax on dividends | 0% | Dividends received are not taxed, and there is no withholding tax on dividends paid. |
| Capital gains | 0% | Gains of a capital nature are not taxed; trading gains are. Gains on disposing of an equity stake of at least 15% held for 24 months are treated as capital. |
| VAT / GST / sales tax | None | Hong Kong has no value added tax, goods and services tax or general sales tax. |
| Withholding tax | 0% on dividends and interest | Royalties paid to non-residents are taxed at an effective rate of about 4.95% of the gross amount, higher for some related-party payments. |
| Stamp duty on Hong Kong shares | 0.1% + 0.1% | Paid by both the buyer and the seller on transfers of Hong Kong stock. |
| Mandatory Provident Fund (MPF) | 5% + 5% | The employer and the employee each contribute 5% of relevant income, capped at HK$1,500 a month each. |
| Global minimum tax (Pillar Two) | 15% minimum | Applies only to multinational groups with consolidated revenue of at least EUR 750 million, for fiscal years starting on or after 1 January 2025. |
Profits tax — companies
8.25% / 16.5%
8.25% on the first HK$2 million of assessable profits and 16.5% on the rest. Only one entity in a group of connected entities can use the lower tier.
Profits tax — unincorporated businesses
7.5% / 15%
The same HK$2 million threshold applies to sole proprietorships and partnerships.
Salaries tax
2%–17%
Progressive rates on net chargeable income, capped by the standard rate: 15% on the first HK$5 million of net income and 16% above it. You pay whichever is lower.
Property tax
15%
Charged on the net assessable value of rental income from Hong Kong property.
Tax on dividends
0%
Dividends received are not taxed, and there is no withholding tax on dividends paid.
Capital gains
0%
Gains of a capital nature are not taxed; trading gains are. Gains on disposing of an equity stake of at least 15% held for 24 months are treated as capital.
VAT / GST / sales tax
None
Hong Kong has no value added tax, goods and services tax or general sales tax.
Withholding tax
0% on dividends and interest
Royalties paid to non-residents are taxed at an effective rate of about 4.95% of the gross amount, higher for some related-party payments.
Stamp duty on Hong Kong shares
0.1% + 0.1%
Paid by both the buyer and the seller on transfers of Hong Kong stock.
Mandatory Provident Fund (MPF)
5% + 5%
The employer and the employee each contribute 5% of relevant income, capped at HK$1,500 a month each.
Global minimum tax (Pillar Two)
15% minimum
Applies only to multinational groups with consolidated revenue of at least EUR 750 million, for fiscal years starting on or after 1 January 2025.
Rates are shown as at 2026 for general guidance. Allowances, concessions and one-off reductions announced in the annual Budget can change the final amount payable.
Key principles of the Hong Kong tax system
Understanding these rules is the starting point for any tax planning decision.
Territorial source principle
Only profits arising in or derived from Hong Kong are subject to profits tax. Where profits are earned depends on the operations that produce them — not on where the company is registered or where its bank account is.
Offshore profits claims
Profits generated by operations carried out outside Hong Kong can be exempt. The exemption is not automatic: it is claimed in the profits tax return and must be backed by evidence, which the Inland Revenue Department (IRD) usually examines in detail.
FSIE regime for multinational groups
Since 2023, foreign-sourced dividends, interest, IP income and disposal gains received in Hong Kong by a member of a multinational group are taxable unless the entity meets the economic substance, participation or nexus requirement.
Double tax agreements
Hong Kong has signed comprehensive double taxation agreements with 60 jurisdictions (as of September 2026), including mainland China. A Certificate of Resident Status from the IRD lets you claim reduced withholding tax and other treaty benefits.
Losses and deductions
Tax losses can be carried forward without a time limit and set off against future profits. Expenses incurred in producing assessable profits are deductible, and qualifying R&D spending attracts enhanced deductions.
Substance and anti-avoidance
Hong Kong has general anti-avoidance rules and transfer pricing rules that require arm’s-length terms between related parties. Planning works only when it reflects how the business genuinely operates.
Our tax planning and advisory services
From one-off structuring advice to year-round support, we cover the tax and corporate questions that matter most to international businesses in Hong Kong.
Tax structuring and planning
We design or review your structure so that profits are taxed where they are genuinely earned, at the lowest lawful cost.
- Choosing between a Hong Kong company, a branch or a holding structure
- Planning cross-border flows: service fees, royalties, dividends and loans
- Remuneration of owner-directors: salary, director’s fees or dividends
- Using the two-tier rate, tax losses and available deductions
Offshore profits claims
We assess whether your profits can qualify as offshore and prepare a claim that stands up to IRD scrutiny.
- Eligibility review based on your actual operations
- Collecting and organising supporting evidence
- Preparing the claim with the profits tax return
- Replying to IRD enquiry letters
Profits tax compliance
We keep your company in good standing with the IRD, from the first return through every annual cycle.
- Profits tax returns and tax computations
- Nil profits tax returns for companies with no assessable profits
- Employer’s returns for directors and staff
- Deadline tracking and extensions through a tax representative
FSIE and economic substance
For members of multinational groups receiving foreign dividends, interest or gains, we check whether the FSIE regime applies and how to qualify for exemption.
- Classification of the entity and its income
- Review of the economic substance and participation requirements
- Recommendations on staff, premises and management in Hong Kong
- Support with IRD advance ruling applications
Double tax treaties and tax residence
We help you use Hong Kong’s treaty network so the same income is not taxed twice.
- Treaty analysis for dividends, interest, royalties and services
- Certificate of Resident Status applications
- Mainland China and other cross-border arrangements
- Coordination with advisers in the other country
General corporate advisory
Practical advice on the business decisions around your company — not only the tax ones.
- Choosing the jurisdiction and type of entity
- Restructuring, changes of shareholders and exit planning
- A bank-ready structure and compliance documents
- Significant controllers register, CRS and record-keeping duties
Can your Hong Kong company pay 0% profits tax?
Yes — if its profits are genuinely earned outside Hong Kong. Many trading and service companies that do business abroad qualify, but the claim is assessed on facts, not on structure. Having no office or staff in Hong Kong does not automatically make profits offshore, and an unsupported claim can lead to back taxes and penalties.
What the IRD examines
- Where contracts with customers and suppliers are negotiated and concluded
- Where goods are bought, sold, stored and delivered
- Where services are actually performed, and by whom
- Where the directors and staff who run the business are located
- How the business is marketed and where orders are processed
What you should prepare
- Signed contracts, invoices and shipping documents
- Correspondence showing where negotiations took place
- Travel records of directors and staff
- A clear description of the business model and operations
- Audited financial statements and organised accounting records
The IRD usually responds to an offshore claim with detailed enquiry letters, and the position is reviewed every year. We help you build the evidence from the start, so you are ready when the questions arrive.
Annual tax calendar for a Hong Kong company
Knowing what comes when helps you avoid penalties, estimated assessments and last-minute rushes.
First profits tax return
A new company usually receives its first profits tax return about 18 months after incorporation, although the IRD may issue it earlier.
Returns issued in April
The IRD issues profits tax returns in bulk on the first working day of April each year.
Filing deadline
A return is normally due within one month of issue. Companies with a tax representative can usually rely on extended deadlines under the IRD block extension scheme, depending on the accounting year-end.
Employer’s return
Employers receive an employer’s return each April and must report the remuneration of directors and employees within one month.
Provisional tax
Provisional profits tax for the next year is generally charged on the basis of the current year’s profits. If profits fall, you can apply to hold it over.
Notification and records
A company that is chargeable to tax but has not received a return must notify the IRD within four months after the end of its basis period. Business records must be kept for at least seven years.
Situations we help with
Every business is different, but these are the questions we hear most often.
Your Hong Kong company trades with suppliers and customers outside Hong Kong.
Offshore claim assessment and documentation
Your company holds shares in subsidiaries abroad and receives dividends.
FSIE review: participation or substance exemption
You run the company yourself and want to know the best way to take money out.
Owner remuneration planning
A client abroad wants to withhold tax from your invoices.
Treaty analysis and Certificate of Resident Status
You have received your first profits tax return or an IRD enquiry letter.
Compliance support and IRD correspondence
You are moving your business to Hong Kong or reorganising a group.
Structuring and general corporate advisory
How we work
Clear advice, an agreed scope of work and no surprises.
Initial consultation
You tell us about your business, structure and goals. We identify the key tax questions and agree the scope of work.
Fact-finding
We review your company documents, contracts and accounts, and how the business actually operates.
Analysis and recommendations
We compare the options and give you written recommendations with the tax impact, risks and practical steps.
Implementation
We put the plan into action: corporate changes, agreements, filings and coordination with your accountant or auditor.
Ongoing support
We track deadlines, handle IRD correspondence and review your position as your business and the rules change.
Pricing
Tax planning and advisory work is quoted after an initial review of your situation. Standard compliance services have fixed prices.
Tax planning and structuring advice
Quoted after an initial review, based on the scope of work
On request
Offshore profits tax claim assistance
From US$1,900
Nil profits tax return
US$400
Nil employer’s return
US$200
Tax Resident Certificate (Certificate of Resident Status)
Per year of application
US$300
Accounting report
Per year
From US$300
Audit report
Per year
From US$500
Government fees and IRD charges, such as advance ruling fees, are paid separately. The final price of advisory work depends on the complexity of your structure and the number of entities involved.
See the full price listGet tax advice
Tell us about your company, where you do business and what you want to achieve — we will outline the key tax points and next steps.
Why clients choose Intergroup
Tax and corporate in one place
We see the full picture — company, accounting, substance and banking — so tax advice fits how your business really works.
Legitimate planning only
We do not sell schemes. Every recommendation is based on Hong Kong law, commercial substance and full disclosure.
Written, practical advice
You get clear recommendations with the numbers, risks and next steps — not pages of theory.
International experience
We work with founders and groups from many countries and advise in English, Russian and Spanish.
Deadlines under control
We track every return and payment date, so your company avoids penalties and estimated assessments.
Support when the IRD asks questions
From enquiry letters to offshore claim reviews, we help you respond fully and on time.
Frequently asked questions about tax in Hong Kong
What is the corporate tax rate in Hong Kong?
Companies pay profits tax at 8.25% on the first HK$2 million of assessable profits and 16.5% on the remainder. Only one entity in a group of connected entities can use the lower 8.25% tier. Unincorporated businesses pay 7.5% and 15%.
Does Hong Kong tax foreign income?
Hong Kong taxes only profits sourced in Hong Kong, so profits earned from operations outside Hong Kong can be exempt through an offshore claim. However, under the FSIE regime, certain foreign-sourced passive income received in Hong Kong by members of multinational groups is taxable unless an exemption requirement is met.
How do I apply for the offshore profits tax exemption?
The claim is made in the profits tax return, supported by audited financial statements and a description of the business. The IRD then usually sends enquiry letters asking for contracts, invoices, travel records and other evidence. Preparing this evidence from day one makes the process much smoother.
Is there VAT or GST in Hong Kong?
No. Hong Kong has no VAT, GST or general sales tax, which keeps pricing and accounting simpler for trading and service businesses.
Are dividends taxed in Hong Kong?
Dividends received are not subject to profits tax, and there is no withholding tax on dividends paid by a Hong Kong company, whether to residents or non-residents. For members of multinational groups, foreign dividends received in Hong Kong may fall under the FSIE regime.
When does a new Hong Kong company file its first tax return?
The first profits tax return is usually issued about 18 months after incorporation, although the IRD may issue it earlier. After that, returns are issued every April. It is best to organise your bookkeeping from the start rather than wait for the first return.
Does my company need an audit if it had little or no income?
In most cases, yes. Hong Kong limited companies generally need audited financial statements to support their profits tax return, even with low turnover or a loss. A company that has been dormant may qualify for an exemption — we can check your situation.
What is the FSIE regime and does it apply to my company?
The foreign-sourced income exemption regime applies to Hong Kong entities that belong to a multinational group, regardless of size. It covers foreign dividends, interest, IP income and disposal gains received in Hong Kong, which are taxable unless the entity meets the economic substance, participation or nexus requirement. Standalone companies that are not part of a group with entities outside Hong Kong are generally outside its scope.
How do I get a Hong Kong tax residence certificate?
A Hong Kong company applies to the IRD for a Certificate of Resident Status to claim benefits under a specific double tax agreement. The IRD reviews how and where the company is managed and operated, and may ask for supporting evidence. We prepare and file the application for you.
Is tax planning legal in Hong Kong?
Yes. Arranging your affairs efficiently within the law is legitimate. What is not acceptable are artificial arrangements whose main purpose is a tax benefit — these can be challenged under Hong Kong’s anti-avoidance rules. That is why we build every plan on genuine business activity and proper documentation.
The information on this page is general guidance on the Hong Kong tax system and does not constitute tax or legal advice. Tax outcomes depend on the facts of each case — contact us for advice on your situation.
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