Tax and compliance for a business in Hong Kong: profits tax, returns, filings

Snapshot

A Hong Kong company pays profits tax under a two tier regime, generally on profits arising in or derived from Hong Kong. It must keep a valid Business Registration Certificate, prepare audited annual accounts, file an annual return with the Companies Registry, and file a profits tax return with the Inland Revenue Department. There is no value added tax and no general sales tax. This is general information, not tax advice. As of 29 April 2026.

Profits tax: Corporations: 8.25 percent on the first 2 million Hong Kong dollars of assessable profits, 16.5 percent above. As of 29 April 2026.
Basis: Territorial source. Profits tax generally applies to Hong Kong sourced profits. As of 29 April 2026.
Key filings: Business Registration Certificate renewal, audited accounts, annual return, and profits tax return.
Always: This is general information. Confirm your position with the Inland Revenue Department or a qualified adviser.

Fees and features as of 29 April 2026Last reviewed 29 April 2026

General information, not financial, legal, or tax advice. Verify current terms and eligibility with the provider before applying.

A Hong Kong company faces a relatively simple tax and compliance regime, but it still has clear obligations. Profits tax runs on two tiers, with a corporation paying 8.25 percent on the first 2 million Hong Kong dollars of assessable profits and 16.5 percent above that, and the system is territorial, so it generally applies to profits arising in or derived from Hong Kong. There is no value added tax, no general sales tax, and no tax on dividends or capital gains. On compliance, a company keeps a valid Business Registration Certificate, prepares audited annual accounts, files an annual return with the Companies Registry, and files a profits tax return with the Inland Revenue Department. This page is general information and not tax advice, shown as of 29 April 2026, so confirm your position with a qualified adviser.

Profits tax in Hong Kong

Profits tax is the main business tax. Under the two tier regime, a corporation pays 8.25 percent on the first 2 million Hong Kong dollars of assessable profits and 16.5 percent on the rest, while an unincorporated business such as a sole proprietorship or partnership pays 7.5 percent and 15 percent on the same split. Hong Kong taxes on a territorial source basis, so profits tax generally applies to profits arising in or derived from Hong Kong rather than to profits sourced elsewhere, although whether income is Hong Kong sourced can be complex. There is no value added tax or general sales tax, no tax on dividends, and no tax on capital gains. This is general information, not tax advice. As of 29 April 2026. Verify the current rates and your position with the Inland Revenue Department or a qualified adviser.

Returns and audited accounts

Most Hong Kong incorporated companies must prepare annual financial statements audited by a Hong Kong practising accountant, then file a profits tax return with the Inland Revenue Department supported by those accounts. The first profits tax return is often issued some months after incorporation, and the filing deadline depends on the accounting date, with extensions available under the block extension scheme in many cases. Keeping proper books and records is a legal requirement. As of 29 April 2026. This is general information, not tax advice. Confirm the deadlines with a qualified adviser.

Business Registration Certificate and annual return

Every business must hold a valid Business Registration Certificate from the Inland Revenue Department, displayed at the place of business and renewed on a one year or three year basis. The renewal fee is set by the government and changes from time to time, and the Inland Revenue Department issues a renewal demand before the certificate period begins. Separately, a company files an annual return with the Companies Registry and keeps statutory records, including a Significant Controllers Register. As of 29 April 2026. Verify the current fee and filing dates with the Inland Revenue Department and the Companies Registry.

An ongoing compliance checklist

These are the recurring obligations most companies track. Your exact duties depend on the business. Verify with a qualified adviser

Renew the Business Registration Certificate and keep it displayed at the place of business.
Prepare audited annual accounts and file the profits tax return by the applicable deadline.
File the annual return with the Companies Registry and keep statutory records, including the Significant Controllers Register, up to date.

Steps to stay compliant

Keep proper books and records throughout the year and choose an accounting date.
Appoint an auditor, prepare audited accounts, and file the profits tax return on time.
Renew the Business Registration Certificate, file the annual return, and update statutory registers as changes occur.

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Questions about tax and compliance in Hong Kong

What is the profits tax rate for a company in Hong Kong?

Under the two tier regime a corporation pays 8.25 percent on the first 2 million Hong Kong dollars of assessable profits and 16.5 percent on profits above that. Unincorporated businesses pay 7.5 percent and 15 percent on the same split. This is general information and not tax advice. As of 29 April 2026. Verify the current rates with the Inland Revenue Department or a qualified adviser.

Does Hong Kong tax foreign income?

Hong Kong taxes on a territorial source basis, so profits tax generally applies to profits arising in or derived from Hong Kong, not to profits sourced outside Hong Kong. Whether income is Hong Kong sourced can be complex, and there are specific rules for certain foreign income. As of 29 April 2026. This is general information, not tax advice. Verify your position with a qualified adviser.

Does a Hong Kong company need audited accounts?

Most Hong Kong incorporated companies must prepare annual financial statements audited by a Hong Kong practising accountant, and file a profits tax return with the Inland Revenue Department supported by those accounts. Filing deadlines depend on the accounting date. As of 29 April 2026. This is general information, not tax advice. Confirm your obligations with a qualified adviser.

What is the Business Registration Certificate and does it renew?

The Business Registration Certificate is issued by the Inland Revenue Department and must be displayed and renewed, on a one year or three year basis, with a fee set by the government that changes from time to time. The Inland Revenue Department issues a renewal demand before the certificate period begins. As of 29 April 2026. Verify the current fee and process with the Inland Revenue Department.

Fees, features, and eligibility change and vary by region. This page was last reviewed on 29 April 2026. Confirm current terms with the provider before applying.