Hong Kong 2013-14 Tax Facts

Profits Tax

  • Share
  • Tax basis: Accounting profits, subject to specific adjustments under the tax code
  • Tax rates: Corporations – 16.5% Others – 15%
  • Losses: Carried forward indefinitely subject to restrictions under the anti-avoidance rules
  • Capital gains: Not taxable
  • Dividends: Not taxable. No withholding tax on payment
  • Approved charitable donations: Tax deductible up to 35% of assessable profits
  • Royalties to non-residents:
      Effective withholding rates*
    Payments to Corporations Non-corporations
    Relationship
    Non-associates 4.95% 4.5%
    Associates (in certain circumstances) 16.5% 15%
    * May be reduced under the terms of an applicable avoidance of double taxation agreement.

    Depreciation allowances Initial Annual
    Plant and machinery 60% 10%, 20% or 30%
    (depending on types and on reducing balance)
    Industrial building 20% 4%
    (of construction costs)
    Commercial building - 4%
    (of actual or deemed
    construction costs)
    Certain environmental protection machinery, environment-friendly vehicles, manufacturing plant and machinery, computer hardware and software 100% -
    Certain environmental protection installation and building refurbishment 20% 20% for 4 years