10 Sep 2009

Hong Kong Profits Tax

by Darren

We identified that in Hong Kong business are only taxed on profits that are sourced in Hong Kong. The profits tax is a simple calculation of income less expenses which equates to Assessable Profits. It is the assessable profits that is taxed at 16.5% for Corporations and 15% for unincorporated businesses. A number of exemptions are granted by the Inland Revenue Ordinance including
  • Dividends from a Hong Kong company which paid Hong Kong taxes
  • Interest on deposits placed in Hong Kong which are accrued after 22 June 1998.
In terms of expenses these are deductible to the extent that they are incurred in earning income. Personal or private expenses such as travel from home to work are non deductible. We will analyze the full list of deductible and non deductible expenses in a few weeks

Next entry: Tax Break
Previous entry: Japan Taxable Income

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