Taxes and Accounting in Hong Kong SAR

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Accounting Rules

Tax Year
The financial year starts on 1st January and ends on 1st April.
Accounting Standards
Not having the force of law, the notification elaborated by the HK Public Accountants Association (Financial Reporting Standards Committee) determines the guideline to be considered for the interpretation and application of the accounting principles and which should be followed in this regard by the members of the profession.
Hong Kong Accounting Standards (HKAS)
Accounting Regulation Bodies
HK Institute of Certified Public Accountants
Accounting Reports
BALANCE SHEET: on December 31 n, to be compared December 31 n-1 FIXED ASSETS CURRENT ASSETS Stocks Marketable securities Debtors Cash CURRENT LIABILITIES Obligations under finance leases Proposed dividends Taxation Creditors Loans and bank overdrafts NET CURRENT ASSETS LONG TERM LIABILITIES Deferred taxation Obligations under finance leases Bank loans SHAREHOLDERS EQUITY Share capital Reserves Retained profits PROFIT AND LOSS ACCOUNT: 1) Turnover 2) Profit before tax 3) Tax 4) Retained profits at the beginning of the fiscal year 5) Dividends 6) Retained profits at the end of the fiscal year.
Publication Requirements
Annual Publication.
Professional Accountancy Bodies
The Institute of Financial Planners of Hong Kong
The Society of Chinese Accountants and Auditors
Association of Chartered Certified Accountants HK
Certification and Auditing
Companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organization. You can contact KPMG, Ernst&Young, Pricewaterhouse coopers.
Accounting News
Accounting news in HK

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Tax Rates

Consumption Taxes

Nature of the Tax
There is no consumption tax in Hong Kong.
Other Consumption Taxes
Find Tax Professionals in Hong Kong on

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Corporate Taxes

Company Tax
Tax Rate For Foreign Companies
Only incomes generated in HK are subjected to taxation (rate of 16.5% and 15% for unincorporated businesses).
Capital Gains Taxation
Long term capital gains are not taxed in Hong Kong.
Main Allowable Deductions and Tax Credit
Expenses are deductible.
Other Corporate Taxes
Stamp duties, registration fees for trading activity, taxes on occupation of landed properties.

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Individual Taxes

Tax Rate

Income Tax Progressive rate from 2% to 17%
From HKD 0 to 40,000 2%
From HKD 40,000 to 80,000 7%
From HKD 80,000 to 120,000 12%
More than HKD 120,000 17%
Allowable Deductions and Tax Credit
The allowances are meant only for persons who have chosen the progressive taxation method.
For further information on deductions, visit the website of the tax authority.
Special Expatriate Tax Regime
No specific tax regime for expatriate.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
Withholding Taxes
Dividends: 0, Interest: 0, Royalties:4,5% / 15% (for nonresident individuals ) 4,95% / 16,5% (for nonresident companies).

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Sources of Fiscal Information

Tax Authorities
Tax Authority
Other Domestic Resources
Tax information
Invest HK

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Find more on about Taxes and Accounting in Hong Kong.

Intellectual Property

National Organizations
Intellectual Property Department for patents and trademarks
Regional Organizations
Consult the list of the Intellectual Property Department
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)

National Regulation and International Agreements

Type of property and law Validity International Agreements Signed
Patent Ordinance 1997
20 years
Trade Marks Ordinance
7 years, renewable for 14 years Nice agreement
Registered Designs Ordinance, chapter 522 of the laws of Hong Kong
5 years,renewable 4 times, that is for 25 years maximum.  
Copyright Ordinance 27 June 1997, chapter 528 of the Laws of Hong Kong
50 years WIPO Copyright Treaty

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Legal Framework

Independence of Justice
Equal Treatment of Nationals and Foreigners
The Language of Justice
English or Cantonese, or in both the languages at the same time.
Recourse to an Interpreter
Sources of the Law and Legal Similarities
Hong Kong's judicial system continues to be based on the English Common Law and the Rules of Natural Justice of Great Britain. In order to maintain a strong autonomy on the judicial system, HK-SAR shows its attachement to the primacy of the "rule of law" as the fundamental law. The judicial system works independently of the system of mainland China.
Checking National Laws Online
Bilingual Laws Information Database
Basi Law full text
Find Legal Experts in Hong Kong on

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National Standards Organizations
Innovation and Technology Commission (ITC)
Integration in the International Standards Network
International Standards Organisation(ISO),
International Electronic Commission (IEC).
Pacific Area Standards Congress (PAS)
APEC Sub-committee.
Online Consultation of Standards
List of different standards on the ITC website.
Certification Organizations
List of different organisations

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Business Practices

General Information
Opening Hours and Days
Banks close on Saturday afternoon and Sunday. Government offices close on Saturday and Sunday.
Stores close at 2200 hrs. They remain open sometimes even on Saturday and Sunday. Companies close at 1800 hours.

Public Holidays

New Year 1st January
Lunar New Year 4 days, date varies every year based on the moon (between mid-January and mid-February).
Good Friday The Friday before Easter (in March or April)
Easter Monday in March or April
Buddha Anniversary May
Labor Day 1st may
Ching Ming Festival 5 April
Tuen Ng Festival In May or June
HKSAR Establishment Day 1st July
National Day 1st October
Lu Pan Birth Anniversary In July
Maidens Festival In August
Liberation Day In August
Mid-Autumn festival In September or October
Cheung Yeung Festival In October
Holiday Compensation
When a public holiday falls on a Sunday or on the same day as another holiday, the next day is a day off. Sometimes the government will select the day before as an off-day.

Periods When Companies Usually Close

Chinese New Year one week in January or February

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