Profit Tax Introduction
Profits tax is payable by every company carrying on a trade, profession or business in Hong Kong on profits arising in or derived from Hong Kong. Profits which have a foreign source (often termed "offshore profits") are generally beyond the territorial scope of Hong Kong's taxation system, including those derived by locally incorporated companies.
Tax Filing due date
Companies registered in Hong Kong are generally tracked by the tax authority and issued with a tax return for the first anticipated "year of assessment" after 18 month since incorporation. Even there is no tax return has been issued, however, the company has an obligation to notify the tax authority if assessable profits have arisen.
The month in which the accounting period ends generally determines the deadline by which the company must file its tax return and financial statements for each year of assessment. Typical filing deadlines are,
|Financial year ended ||Filing due date |
| Between 1 January and 31 March || ||15th November of the calendar year in which the financial year ended |
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| Between 1 April and 30 November || ||2nd May of the calendar year following which the financial year ended |
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| Between 1 December and 31 December || ||15th August of the calendar year following which the financial year ended |
- （1）Capital gains
- （2）Offshore profits
- （3）Deposit interest
Provisional Profits Tax
Notice of assessment will be issued after the tax return has been filed with the tax authority. For tax collection purposes, provisional tax will be payable during the tax year based on the preceding year's tax liabilities. The provisional profits tax paid will be credited against the final profits tax assessed.
Double Tax Agreement / Arrangement (DTA)
Hong Kong tax liabilities and filing obligations can also arise on overseas payments for the use of intellectual property (normally 4.95% of the royalties payments but a reduced rate may be applied when a comprehensive double tax agreement / arrangement (DTA) is applicable and on Hong Kong consignment agents who sell goods on behalf of a non-resident (0.5% of the gross sales proceeds). These both operate like withholding taxes.
Hong Kong has so far entered into the DTA with Austria, Belgium, Brunei, Canada, the Czech Republic, France, Guernsey, Hungary, Indonesia, Ireland, Italy, Japan, Jersey, Kuwait, Liechtenstein, Luxembourg, Malaysia, Malta, Mexico, the Netherlands, New Zealand, the People's Republic of China (PRC), Portugal, Qatar, Spain, Switzerland, Thailand, the UK and Vietnam.