Profits Tax

Hong Kong adopts the territorial source tax system, whereby only income arising in or derived from a trade, profession or business carried on in Hong Kong is subject to profits tax.

The tax rates varies depending on factors such as the general form through which the business is being conducted, such as by means of a sole proprietorship or a general partnership (15%) versus a limited company or a limited partnership (16.5%). In addition, the tax rate also depends on the amount of profit generated, i.e. profits up till the threshold of HKD 2,000,000 are subject to either a rate of 7.5% or 8.25%, whereas profits above HKD 2,000,000 are subject to a rate of either 15% or 16.5% respectively.

 

Who is Subject to the Tax?

 

A company incorporated in Hong Kong for example is exposed to Hong Kong (corporate) tax on profits unless it can lodge an offshore non-taxable claim for its offshore sourced profits. On the other hand, a company incorporated outside of Hong Kong and which carries on business in Hong Kong and earns Hong Kong sourced profits is rather likely subject to Hong Kong tax, therefore having tax reporting obligations in Hong Kong.

Similarly, non-resident entertainers and non-resident sportsmen performing in Hong Kong for a remuneration fee are likely to be seen to carry out a business in Hong Kong, also subject to Hong Kong profits tax. The subsequent related tax assessment is raised upon their agents in Hong Kong, i.e. the parties that pay the fee to these entertainers and sportsmen. Those agents have the obligation to withhold an amount of tax from the payable remuneration.

 

Profits Tax Management

 

We assist our clients in managing their international tax exposure. We provide suggestions and solutions on how to strengthen clients’ offshore claim where necessary and possible, thereby always making sure that our tax advisors comply with the relevant local tax rules and regulations of Hong Kong.

In summary:

  • Profits tax return filing
  • Handling profits tax enquiries from the tax authorities
  • Lodging objections against the tax assessments issued by the tax authorities
  • Lodging applications for holding over of provisional tax charged by the tax authorities

 

Contact us to learn more about our services

 

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About Us

HKWJ Tax Law & Partners Limited is an international boutique firm providing its clients tailor-made tax services, audit, accounting & company incorporation and advisory services in Hong Kong and around the globe. HKWJ Tax Law & Partners Limited is a proud member of the HKWJ Group.

Our Services

Our services include not only tax law advice on beneficial structures for corporations and private individuals, but also tax compliance services, such as Hong Kong tax returns, Hong Kong employers returns and Hong Kong transfer pricing documentation. When required, we assist our clients with their tax disputes, investigation or litigation that may arise during the course of their businesses or their private life. Within the HKWJ Group, various other services are provided such as business advisory, consultancy services, digital marketing, and human resources solutions.

In addition, we are much more than a tax firm as we offer accounting & audit services, incorporation of company & company secretarial services and process agent services. All our services are carried with the utmost confidentiality and respecting our strict privacy policy.

Our Vision

The tax system in Hong Kong is simple but not straight forward. Globalisation has resulted into Hong Kong accepting various international tax standards, making its tax laws more complicated. At HKWJ Tax Law & Partners Limited, we are guiding our clients through this challenging tax law climate, thereby contributing to the growth of their success. Only together, we all grow.

Our People

Our accountants and tax law advisors have all a professional background in either accounting or tax laws and gained in-depth accounting & tax knowledge from large accounting & law firms. As your trusted accounting and tax advisor, we can make your taxes issues less stressful and worrisome, and hopefully, make them even go away. In addition, our in-house consultants can assist with business advisory services, risk management, compliance, digital marketing, and human resources solutions.

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Our People

Willem Jan Hoogland

Partner Get in touch

Lucas Ting

Senior Tax Advisor Get in touch

Samuel Fung

Senior Tax Advisor Get in touch

Andy Ma

Accountant Get in touch

Annie Choi

Company Secretary Get in touch

Wistar Wong

Accountant Get in touch

Mei Shu

Marketing Manager Get in touch

Testimonials

If that’s what I understand, we won the case. I just can’t believe it, I wait for your confirmation to celebrate it, but in any case, you did an amazing job and I would be the first one to recommend you.

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