Hong Kong Corporate Income Tax
Detailed corporate income tax rates and rules for Hong Kong in 2026.
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%
Additional Notes
Hong Kong's territorial tax system means that a company incorporated in Hong Kong but earning all profits offshore pays no profits tax. The IRD applies a substance-over-form approach to determine income source. Hong Kong has introduced a foreign-sourced income exemption (FSIE) regime from 2023 requiring economic substance for certain passive income received by multinational entities to remain tax-exempt, in line with international standards.
How Hong Kong Corporate Tax compares
Hong Kong’s corporate tax rate of 16.5% is the 160th highest of 203 countries TaxAtlas tracks, below the global average of 22.2% and Asia’s regional average of 19.7%.
