Territorial, not tax-free
Profits Tax Registration & Returns in Hong Kong
Hong Kong taxes profits sourced in Hong Kong. “Offshore” treatment is a claim you must support, not a default.
GCC business setup specialists
The offshore claim is the whole question
Hong Kong’s territorial basis is widely misunderstood as meaning foreign-owned companies pay nothing. In practice whether profits are Hong Kong-sourced is a technical question, and an offshore claim must be supported with evidence when the Inland Revenue Department asks.
- Source position assessed honestly, not assumed
- Returns prepared from audited statements
- Offshore claims supported with evidence or not made
20+
Mainland, free zone and offshore jurisdictions we file in — so the recommendation is based on your activity, not on which authority we happen to be registered with.
7,000+
Companies successfully established.
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What applies
Hong Kong tax obligations
Which apply depends on where your profits actually arise.
| Obligation | Who it affects | What we do |
|---|---|---|
| Business Registration | Every business | Obtain and renew on its cycle |
| Profits tax return | Companies, when issued by the IRD | Prepare and file from audited statements |
| Two-tiered rates | Profits chargeable to profits tax | Apply the correct rate band |
| Offshore source claim | Companies with non-Hong Kong profits | Assess honestly and document the basis |
| Employer’s return | Employers | Prepare and file |
| No VAT or GST | All businesses | Nothing to register for |
Rates, bands, source rules and deadlines are set by the Inland Revenue Department and change. Your position is confirmed against current rules in writing before filing.
How it works
From registration to filed return
Source is established before a claim is made, not after a query.
01
Assess the position
Where your profits actually arise, whether an offshore claim is genuinely available, and what evidence would support it.
02
Register and set up
Business Registration in place and records kept so the return can be produced from audited statements.
03
File and support
Profits tax return prepared and filed, with the supporting basis retained in case it is examined.
To assess your position
What we need to look at
An offshore claim rests on operational facts, not on the shareholder’s address.
- Certificate of Incorporation and Business Registration
- Audited financial statements
- Where contracts are negotiated and concluded
- Where customers and suppliers are located
- Where staff and decision-makers work
- Whether there is a Hong Kong office
- Sample customer contracts
- Sample supplier contracts
- Bank accounts and where they are operated
- Prior profits tax returns
- Any IRD correspondence
- Related-party arrangements
Scope
What is included, and what is not
Stated plainly, so nothing is added once the engagement starts.
Included in the service fee
- Assessment of the source position
- Business Registration and renewal
- Profits tax return preparation and filing
- Employer’s return where you employ
- Documentation of an offshore claim basis
- Record-keeping set up to support filings
- Deadline tracking
- A named adviser who explains the position
Not included, quoted separately
- Government and filing fees
- Penalties arising before our engagement
- The statutory audit itself
- Formal tax opinions on complex source questions
- Representation in an IRD enquiry, quoted separately
- Transfer pricing studies
- Filings outside Hong Kong
- Backlog bookkeeping
Verify independently
Official Hong Kong authorities
We file directly with these bodies on your behalf.
Companies RegistryInland Revenue DepartmentImmigration DepartmentMandatory Provident Fund Schemes AuthorityIntellectual Property DepartmentGovHK
Questions
Hong Kong profits tax — FAQs
Is Hong Kong tax-free?
No. Hong Kong taxes profits with a Hong Kong source. There is no VAT or GST, and foreign-sourced profits may fall outside the charge, but that is a claim to be supported rather than an automatic result.
What is an offshore claim?
A claim that profits arose outside Hong Kong and are therefore not chargeable. It depends on where the profit-generating activities actually took place, and the IRD can and does examine it.
Will my offshore claim be accepted?
Only if the operational facts support it. We will tell you honestly when we think a claim is weak rather than filing one that will fail on enquiry.
What are the rates?
Profits tax operates on a two-tiered basis with rates and bands set by the authorities and subject to change. We confirm the figures applying to your period at filing.
Is there VAT in Hong Kong?
No. There is no VAT or GST, which removes an entire layer of compliance compared with the Gulf.
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At Black Swan Business Setup Services, our mission is simple: to empower entrepreneurs and companies of all sizes to establish and expand their presence in the UAE, Oman, Saudi Arabia, Bahrain, and beyond.
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