The Tax System in Hong Kong
Companies registered in Hong Kong are not taxable provided that no transaction is carried out in Hong Kong.
If this is not the case, the tax rate rises to 16.5% on profits made during the year.
Accounting, Audit and Tax Declarations
The Hong Kong tax authorities will send out a form entitled “ Profits Tax Return” 18 months after the registration of the company. This is the moment to ask for “offshore” status, if applicable. Therefore, at the anniversary of your company, SFM will contact you to collect the bank statements of the company with all supporting documents and prepare the account and audit works in order to deal with the tax declaration and to file the PTR (Profits Tax Return) & ER (Employer return) with Hong Kong authorities. Profits Tax Returns must, as a general rule, be submitted within one month from the date on which they are issued. If the tax return is not submitted by the due date, it is considered as an offence, and will be subject to government penalty. If the company did not carry out any transaction then the “Nil” profit tax return status will be submitted.
Please see information on our website under Hong Kong price list for accounting services and tax filings.
"OffShore" Status :
The company will be liable for tax if:
- it has its own premises in Hong Kong and employs staff.
- the company is partly or wholly managed on Hong Kong territory.
- its client base is in Hong Kong.
- its suppliers are in Hong Kong.
- material destined for sale is stocked in Hong Kong.
If none of these conditions apply, at the customer’s request, SFM will make an application to the Hong Kong authorities with supporting documentary evidence for “offshore” status. Once the tax department agrees to the claim it will be valid for three to four years. This service is payable.
It should be noted that as Hong Kong is a special administrative area, it is entirely permissible to conduct business with China without being subject to tax.