Hong Kong Tax Rates
Hong Kong operates a territorial tax system where only income sourced in Hong Kong is subject to tax. The maximum salaries tax rate is 15% (standard rate) or progressive rates up to 17%, whichever is lower. There is no VAT/GST, no capital gains tax, no withholding tax on dividends, and no sales tax, making Hong Kong one of the world's most tax-friendly jurisdictions. The corporate profits tax rate is 16.5% with a two-tiered system offering 8.25% on the first HKD 2 million of profits.
Top Income Tax Rate
17%
Corporate Tax Rate
16.5%
VAT / Sales Tax
0%
Capital Gains Tax
0%
Detailed Tax Information
Income Tax Brackets
Hong Kong's salaries tax is levied on employment income sourced in or derived from Hong Kong. Taxpayers are assessed at the lower of progressive rates (2%-17%) applied to net chargeable income OR a standard rate of 15% applied to net income before personal allowances. A basic personal allowance of HKD 132,000 applies. Only Hong Kong-sourced income is taxable under the territorial system; income earned outside Hong Kong is not subject to tax regardless of remittance. There is no concept of worldwide taxation.
| Income Range | Tax Rate |
|---|---|
| HK$0 – HK$50K | 2% |
| HK$50K – HK$100K | 6% |
| HK$100K – HK$150K | 10% |
| HK$150K – HK$200K | 14% |
| HK$200K+ | 17% |
Corporate Tax
Hong Kong's profits tax is levied at 16.5% on assessable profits derived from Hong Kong. A two-tiered profits tax regime applies: the first HKD 2 million of assessable profits is taxed at 8.25%, with the remainder at 16.5%. Only one connected entity in a group can benefit from the reduced rate. Unincorporated businesses are taxed at 15% (7.5% on the first HKD 2 million). Only profits sourced in Hong Kong are taxable; offshore profits are exempt.
Standard Rate
16.5%
Small Business Rate
8.3%
Capital Gains Tax
Hong Kong does not impose a capital gains tax. Gains from the disposal of capital assets, including shares, real estate, and other investments, are not subject to tax. However, if the Inland Revenue Department considers the gains to be trading profits (from a business of buying and selling assets), they may be assessed to profits tax at the standard rates. The distinction between capital and revenue nature is determined based on the 'badges of trade' analysis.
Rate
0%
VAT / Sales Tax
Hong Kong does not impose a VAT, GST, or general sales tax. This is a key feature of Hong Kong's simple and low-tax system and a major factor in its attractiveness as an international business center. There have been periodic proposals to introduce a GST, but these have consistently been rejected. The government relies primarily on profits tax, salaries tax, stamp duties, land revenues, and investment returns for fiscal revenue.
Standard Rate
0%
Cryptocurrency Tax
Hong Kong does not impose capital gains tax on cryptocurrency transactions. Individual investors who hold crypto as investments do not pay tax on gains. However, businesses that trade cryptocurrency as part of their operations may be subject to profits tax at 16.5% on gains sourced in Hong Kong. Hong Kong has positioned itself as a major crypto hub with a licensing framework for virtual asset trading platforms.
Tax Treaties
Hong Kong has approximately 45 comprehensive double taxation agreements in force. Given its territorial tax system, treaties primarily serve to reduce withholding taxes on cross-border payments and provide certainty on tax obligations. The Mainland China-Hong Kong arrangement is particularly significant given the close economic integration. Hong Kong has also signed Tax Information Exchange Agreements (TIEAs) with additional jurisdictions.
Treaty Network
45
Double taxation agreements
Major treaty partners:
Key Details
Relocate to Hong Kong
See how much you could save by moving here from your current country.
+$15K
Tax in United States
$24K
24.4% effective
Tax in Hong Kong
$9K
9% effective
You Save
63.1%
less tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
