Profits Tax

Profits Tax is imposed on all corporations, branches, partnerships, joint ventures, trusts, individuals and unincorporated bodies of persons carrying on business in Hong Kong for assessable profits sourced in Hong Kong. It is not imposed on profits from the disposal of capital assets.

Corporations are currently taxed at the rate of 17.5% while individuals and partnerships are taxed at 16%. Partnerships which are themselves corporations are taxed at the rate of 17.5%.

In order to allow Hong Kong to develop into a regional reinsurance centre and to provide a level playing field, with effect from 1998/99, assessable profits derived from reinsurance of offshore risks will be subject to profits tax at a concessionary rate of 8.75% (i.e. 50% of normal tax rate).

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