Taxation Services

We provide a comprehensive range of tax services to both local and international clients. We have expertise in advising international clients on appropriate tax planning strategies and on structuring their commercial and personal interests in the most tax-efficient way, including the establishment of Hong Kong and offshore-based companies and trusts.

We can also provide advice on the tax implications of buy-outs, mergers or similar business transactions which could affect tax liabilities and tax planning strategies. We undertake responsibility for the preparation and submission of clients' tax returns including agreeing tax liabilities and dealing with enquiries from the Inland Revenue Department. We also provide clients with up-to-date estimates of current and future tax liabilities.

Hong Kong has the world's most business-friendly tax regime with no value added or sales taxes; no capital gains tax and no withholding taxes on dividends or interest. Only income sourced in Hong Kong is taxable. A person's income is currently taxed to a maximum of 16% and corporation is taxed at 17.5%.

The Inland Revenue Department issues tax returns, and assessments are issued based on information filed. The assessment shows the amount assessed, the tax payable, and the due dates for payment. There are no prescribed dates for payment of tax beyond those notified to taxpayers in their own assessment.

The fiscal year end is 31 March, but liability to Profits Tax is calculated by reference to results of the accounting period ending in that year of assessment rather than profits arising during the fiscal year.

A provisional assessment of tax is issued based on the profits of the preceding year. The amount to pay is applied against the agreed final liability of the current year and any excess is applied against provisional tax payable for the succeeding year. The taxpayer may apply for holdover of provisional tax if the profits for the year of assessment are less than 90% of the assessable profits of the preceding year.

Provisional assessments apply in the case of both Profits Tax and Salaries Tax. In the case of Salaries Tax, the fiscal year end (31 March) is always adopted for tax purposes.

Hong Kong has not entered into any double tax treaties with other countries except for one entered into with the USA in respect of income from shipping operations and double taxation arrangements in respect of air traffic income with Korea, The Netherlands, New Zealand, Canada, Germany and the United Kingdom. Recently, Hong Kong has reached an understanding with the relevant authorities in the People's Republic of China on arrangements aimed at minimising the scope of double taxation between the Mainland and Hong Kong. The arrangements cover airline and shipping operations as well as other business areas.

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