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Tax (Hong Kong)
The tax year in China runs from 1 April to 31 March. Two payments are due per year according to assessment notices, generally between November and April. The first payment is 75% of the provisional tax for the current year plus any outstanding amount from the previous year; the second is 25% of the provisional tax for the current year.
Corporate Income Tax: 16.5%
Hong Kong businesses are only subject to profits tax on income sourced within Hong Kong; non-Hong Kong businesses are not subject to profits tax even on income sourced within Hong Kong. Determination of the source requires case-by-case consideration by the Inland Revenue. Tax rate is halved for income from qualifying debt instruments with a maturity period of between 3 and 7 years; tax rate is zero if the maturity period is 8 years or more. Tax credit is available for income taxes paid in Belgium, Mainland China or Thailand up to the amount that would have been due per item if taxed in Hong Kong.
Branch Tax: 17.5%
Withholding Taxes: 0%
Except royalties: 5.25 or 17.5% (to corporations); 4.8 or 16% (to individuals)
Capital Gains Tax: 0%
VAT: 0%
Tax treaties
The PRC’s tax treaties do not apply to Hong Kong. Hong Kong has full DTA’s with Belgium, Luxembourg, PRC and Thailand; it has a much longer list of DTA’s relating only to income from air transport and shipping.
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