This Hong Kong tax guide covers the rules in force from 1 April 2026, the start of the 2026/27 year of assessment. Only Hong Kong-sourced income is taxed: profits tax is 8.25% on the first HK$2,000,000 (~$255,000) and 16.5% above, and salaries tax never exceeds 15% of net income, or 16% above HK$5,000,000 (~$638,000). There is no VAT, capital gains tax, dividend tax or estate duty. The 2026-27 Budget raised personal allowances and lifted stamp duty on homes above HK$100,000,000 (~$12,800,000) to 6.5%.
Introduction
Hong Kong is a Special Administrative Region of the People’s Republic of China, returned by the United Kingdom in 1997 and governed under “one country, two systems”, with the Basic Law guaranteeing its separate economic, legal and tax systems until 2047. About 7,510,800 people live on roughly 1,110 km² at the mouth of the Pearl River Delta, bordering Shenzhen. The legal system is English-derived common law, and Chinese and English are both official languages. Hong Kong is a free port and a separate customs territory, and its dollar has been pegged to the US dollar since 1983. The climate is humid subtropical, housing is among the most expensive anywhere, and safety, transport and international schooling are excellent. GDP grew 3.5% in 2025, with 3.5%–4.5% forecast for 2026.
This Hong Kong tax guide matters because the territory pairs one of the simplest low-rate tax systems among major financial centres with deep capital markets and common-law courts. There are only three direct taxes — salaries tax, profits tax and property tax — all strictly territorial, so foreign income, dividends, interest and capital gains fall outside the net. Recent changes are fine-tuning: a 16% standard rate on net income above HK$5,000,000 (~$638,000) from 2024/25, a 15% minimum top-up tax for large groups from 1 January 2025, and higher personal allowances from 1 April 2026.
Direct Taxes
Hong Kong taxes by source, not residence. Salaries tax falls on employment income arising in or derived from Hong Kong, profits tax on profits from a business carried on and sourced there, and property tax on rent from Hong Kong land; profits arising abroad are not taxed even when remitted. Hong Kong tax residency matters mainly for treaties: an individual qualifies for a certificate of resident status by ordinarily residing there or staying more than 180 days in a year of assessment (or 300 days over two consecutive years), and a company by being incorporated, or normally managed or controlled, in Hong Kong. The key concept for investors is the territorial source principle — where the operations that produced a profit took place decides whether any tax is due at all.
Personal income tax (salaries tax, 2026/27 bands)
| Net chargeable income (HK$, USD) | Rate |
|---|---|
| 0 – 50,000 (~$0–$6,400) | 2% |
| 50,001 – 100,000 (~$6,400–$12,800) | 6% |
| 100,001 – 150,000 (~$12,800–$19,100) | 10% |
| 150,001 – 200,000 (~$19,100–$25,500) | 14% |
| Over 200,000 (~$25,500) | 17% |
| Standard rate — net income up to 5,000,000 (~$638,000) | 15% |
| Standard rate — net income above 5,000,000 (~$638,000) | 16% |
Hong Kong salaries tax is the lower of the progressive scale on net chargeable income and the standard rate on net income before allowances. The bands are unchanged for 2026/27, but the 2026-27 Budget raised the allowances from 1 April 2026: basic HK$145,000 (~$18,500), up from HK$132,000 (~$16,800); married person’s HK$290,000 (~$37,000); child HK$140,000 (~$17,900), doubled in each of a newborn’s first two years. The 2026 Policy Address of 16 September 2026 proposes HK$160,000 (~$20,400) for second and later children born from that date. A single employee earning HK$1,000,000 (~$128,000) pays HK$124,290 (~$15,900) after the HK$18,000 (~$2,300) MPF deduction — 12.4% — and the 15% cap takes over above roughly HK$2,130,000 (~$272,000) of net income. The one-off 2025/26 rebate was 100% up to HK$3,000 (~$380). Employees on non-Hong Kong employment are taxed only on the share of pay matching their days in Hong Kong, and not at all if their visits total 60 days or fewer in the year.
Corporate income tax (profits tax)
| Item | Rate |
|---|---|
| Corporations — first HK$2,000,000 (~$255,000) of assessable profits | 8.25% |
| Corporations — remainder | 16.5% |
| Unincorporated businesses — first HK$2,000,000 (~$255,000) / remainder | 7.5% / 15% |
| Profits sourced outside Hong Kong | 0% |
| Patent box — qualifying IP income (from 2023/24) | 5% |
| Qualifying funds, family-owned investment holding vehicles, carried interest | 0% |
| Corporate treasury centres, reinsurers, captive insurers, aircraft and ship leasing managers | 8.25% |
| Hong Kong minimum top-up tax — groups with revenue of €750,000,000 (~$870,000,000) or more | Top-up to 15% |
The two-tier Hong Kong profits tax rate has applied since 2018/19, and only one entity in a group of connected entities gets the lower tier. There is no withholding tax on dividends or interest; royalties paid to non-residents bear an effective 4.95%. Losses carry forward indefinitely, with no carry-back or group relief. Since 1 January 2023 the foreign-sourced income exemption (FSIE) regime taxes foreign dividends, interest, IP income and disposal gains received by members of multinational groups unless they pass an economic substance test, a participation exemption (5% held for 12 months) or the IP nexus test; standalone companies are outside it. Since 1 January 2024, onshore gains on stakes of at least 15% held for 24 months are non-taxable capital. The minimum tax ordinance enacted on 6 June 2025 applies the income inclusion rule and the top-up tax to fiscal years beginning on or after 1 January 2025. Pending: a half-rate regime for commodity traders and the 5% packages floated in the 2026 Policy Address.
Social security and health contributions
| Contribution | Employee | Employer | Self-employed |
|---|---|---|---|
| MPF mandatory contribution | 5% of relevant income | 5% of relevant income | 5% of relevant income |
| Relevant income band | HK$7,100–30,000 (~$910–$3,800) a month | Up to HK$30,000 (~$3,800) a month, no minimum | HK$85,200–360,000 (~$10,900–$45,900) a year |
| Maximum contribution | HK$1,500 (~$190) a month | HK$1,500 (~$190) a month | HK$18,000 (~$2,300) a year |
| Health levy / social insurance | None | None | None |
The Mandatory Provident Fund is a privately managed pension scheme, not a social insurance tax, and its HK$30,000 (~$3,800) monthly ceiling makes it trivial for high earners: combined contributions stop at HK$36,000 (~$4,600) a year, and up to HK$18,000 (~$2,300) is tax-deductible. Expatriates permitted to stay 13 months or less, or covered by an overseas retirement scheme, are exempt. There is no health levy — public healthcare is funded from general revenue — though employers must insure staff against work injuries. Since 1 May 2025, employers’ MPF contributions can no longer offset severance or long service payments for later service.
Indirect Taxes
Hong Kong levies no VAT, GST or general sales tax, and as a free port charges no customs tariffs. Indirect taxation is a short list of excise duties, stamp duties and service levies.
Value-added tax (VAT)
| Rate | Applies to |
|---|---|
| None | No VAT or GST has ever been introduced; no sales tax on goods or services |
| None | Free port — no customs import tariffs |
| Specific / ad valorem | Excise duties on only liquor above 30% alcohol, tobacco, hydrocarbon oil and methyl alcohol |
Excise and other indirect taxes
| Tax | Notes |
|---|---|
| Excise duties | Liquor above 30% alcohol: 100% on the first HK$200 (~$26) of value, 10% on the rest (since 16 October 2024); wine and beer 0%; cigarettes HK$3,306 (~$420) per 1,000 sticks; unleaded petrol HK$6.06 (~$0.77) a litre |
| Stamp duty — property | HK$100 (~$13) up to HK$4,000,000 (~$510,000); 1.5%–4.25% up to HK$100,000,000 (~$12,800,000); 6.5% on residential property above that, from 26 February 2026 |
| Stamp duty — shares | 0.1% paid by each of buyer and seller on Hong Kong stock, plus HK$5 (~$0.64) per transfer deed |
| Buyer’s, special and new residential stamp duties | Abolished from 28 February 2024 |
| Hotel accommodation tax | 3% since 1 January 2025 (0% from July 2008) |
| Air passenger departure tax | HK$200 (~$26) on tickets bought from 1 October 2025, up from HK$120 (~$15) |
| First registration tax (private cars) | Progressive, 46%–132% of taxable value; the electric private car concession was not renewed after 31 March 2026 |
| Business registration fee | HK$2,200 (~$280) plus a HK$150 (~$19) levy for a one-year certificate |
For buyers, the key point is parity: since 28 February 2024, Hong Kong stamp duty on property follows one ad valorem scale, so a non-resident or corporate buyer pays exactly what a permanent resident pays. Marginal relief smooths each band edge. The 6.5% band, passed on 20 May 2026 with retrospective effect, applies only to homes; non-residential property still tops out at 4.25%. The 2026 Policy Address adds a proposed waiver of up to HK$20,000 (~$2,550) for families buying a home around the birth of a child.
Other Taxes Worth Knowing
| Tax | Hong Kong treatment |
|---|---|
| Capital gains tax | None. Gains of a capital nature are untaxed; gains from trading are business profits and taxed as such |
| Dividends (resident individual) | None — Hong Kong and foreign dividends are tax-free, with no withholding |
| Interest (resident individual) | None on deposit and bond interest held as investments |
| Rental income | Property tax at 15% of net assessable value (rent less rates paid by the owner and a flat 20% allowance) — an effective 12% of rent |
| Wealth / net worth tax | None |
| Inheritance / estate tax | None — estate duty abolished for deaths on or after 11 February 2006 |
| Gift tax | None as such; gifts of Hong Kong property or shares pay stamp duty as if sold at market value |
| Immovable property tax (annual) | Rates of 5% of rateable value; homes rated above HK$550,000 (~$70,000) pay 8% on the next HK$250,000 (~$31,900) and 12% above HK$800,000 (~$102,000), since 1 January 2025. Government rent of 3% of rateable value on leases granted or extended since 1985 |
| Withholding tax on outbound payments | None on dividends and interest; royalties about 4.95% |
For a private investor living in Hong Kong, the local bill on a portfolio is zero. The leakages are foreign — US dividends still suffer 30% US withholding, as there is no Hong Kong–US tax treaty — plus 0.1% stamp duty on each side of a local share trade. Property is where Hong Kong bites: rates, government rent and the effective 12% property tax, with no mortgage-interest deduction unless an individual landlord elects personal assessment. Frequent, leveraged trading can also be treated as a business and taxed at up to 15% for an individual.
Disadvantages & Risks
Hong Kong’s biggest risk is geopolitical. The 2020 National Security Law and the March 2024 Safeguarding National Security Ordinance changed the political climate, and the United States ended Hong Kong’s separate trade treatment in 2020 and has sanctioned officials, leaving businesses exposed to sanctions on both sides. The economy is concentrated in finance, trade and property and ever more tied to mainland China. Public finances ran several years of deficits: the government expects an operating surplus from 2025-26 but leans on bond issuance, with debt rising from 14.4% to 19.9% of GDP over its medium-range forecast — hence the restored hotel tax, the higher departure tax, the 16% salaries tax tier and the 6.5% stamp duty band. Housing is extremely expensive, and opening a bank account for a new company with foreign owners can take months.
International standing is solid. Hong Kong left the EU’s Annex II watchlist in February 2024 after tightening its FSIE rules, appears on neither Annex I nor Annex II in the 17 February 2026 update, and is not on the FATF list of jurisdictions under increased monitoring as at 19 June 2026. It exchanges financial account data under the Common Reporting Standard, so there is no secrecy advantage. The treaty network reached its 60th comprehensive agreement, with Slovenia, on 4 September 2026, but has none with the United States, Germany, Australia or Singapore. Substance is tested everywhere: offshore claims are scrutinised case by case, FSIE exemptions need people and spending in Hong Kong, and groups with revenue of €750,000,000 (~$870,000,000) or more pay 15% through the top-up tax.
Strategy & Ideal Profile
The classic structure is a Hong Kong limited company, held directly or through a holding company. It pays HK$330,000 (~$42,100) on HK$3,000,000 (~$383,000) of profit — an effective 11% — and dividends then leave with no withholding and no shareholder tax, so that is the whole bill. Where the profit-producing operations genuinely happen abroad, an offshore claim can take the rate to 0%, with evidence and scrutiny to match. Foreign companies can move in without liquidation under the re-domiciliation regime in force since 23 May 2025. Wealthy families can run a single family office through a family-owned investment holding vehicle taxed at 0%, with at least HK$240,000,000 (~$30,600,000) of assets, two qualified full-time staff and HK$2,000,000 (~$255,000) of annual spending in Hong Kong; a June 2026 bill would add private credit, digital assets and overseas property to the qualifying assets. The New Capital Investment Entrant Scheme grants residence for HK$30,000,000 (~$3,830,000) of investment, of which HK$3,000,000 (~$383,000) goes into the CIES Investment Portfolio and up to HK$15,000,000 (~$1,910,000) may be real estate.
Several profiles fit. Company owners trading across Asia get a low headline rate, tax-free dividends and common-law contracts. Investors and traders pay nothing on gains, dividends or interest, and hold a currency pegged to the US dollar. Dividend earners keep the full distribution. High earners on Hong Kong salaries face a hard 15% cap, or 16% above HK$5,000,000 (~$638,000), and no social insurance beyond the MPF. Family offices combine 0% on investment profits with no estate duty. On residency, Hong Kong tax depends on source, not days, so the practical test is breaking tax residence at home; the 180-day and 300-day tests matter only for a treaty certificate. The right to live there comes from a visa — employment, the Top Talent Pass Scheme (income of HK$2,500,000 (~$319,000) a year or a top-100 university degree) or the New CIES — with permanent residence possible after seven years.
Hong Kong does not suit everyone. US citizens remain taxable on worldwide income. Residents of countries with CFC rules, exit taxes or place-of-management tests — most of Europe — can see a Hong Kong company’s profits taxed at home unless they genuinely relocate and run it from Hong Kong. Salaried employees gain less than owners, landlords get no mortgage-interest relief under property tax, and groups above €750,000,000 (~$870,000,000) pay 15% regardless. Without real substance, offshore claims and FSIE exemptions fail.
FAQ
Is Hong Kong a tax haven?
Not by the standard measures. Hong Kong is on neither Annex I nor Annex II of the EU list of non-cooperative jurisdictions (February 2026) and not on the FATF grey list (June 2026). It exchanges account data under the CRS, has signed 60 comprehensive tax treaties and applies the 15% minimum tax to large groups — a low-rate territorial system, not a no-tax haven.
What is the corporate tax rate in Hong Kong in 2026?
Profits tax is 8.25% on the first HK$2,000,000 (~$255,000) of assessable profits and 16.5% above for corporations, and 7.5% and 15% for unincorporated businesses. A company earning HK$3,000,000 (~$383,000) pays HK$330,000 (~$42,100), an effective 11%. Only Hong Kong-sourced profits are taxed.
How does the Hong Kong territorial tax system work?
Only income arising in or derived from Hong Kong is taxed; foreign profits are exempt even when remitted. Source follows where the profit-producing operations took place. Since 1 January 2023, foreign dividends, interest, IP income and disposal gains received by members of multinational groups are taxable unless the economic substance, participation or nexus tests are met.
What is the 60-day rule in Hong Kong?
An employee whose employment is based outside Hong Kong pays no salaries tax if visits total no more than 60 days in the year of assessment, which runs from 1 April to 31 March; above that, income is apportioned by days in Hong Kong. Separately, staying more than 180 days in a year of assessment qualifies an individual for a certificate of resident status.
Does Hong Kong tax capital gains?
No. Gains on capital assets are untaxed; only trading profits from a business are taxed, at up to 16.5% for companies. Since 1 January 2024, onshore gains on equity stakes of at least 15% held for 24 months are treated as capital, except for unlisted property companies.
Is there inheritance or wealth tax in Hong Kong?
No. Estate duty was abolished for deaths on or after 11 February 2006, and there is no wealth tax or gift tax. The only charge on a lifetime gift is stamp duty, due at market value on gifts of Hong Kong property or shares.
How are dividends taxed for a non-resident investor?
They are not. Hong Kong levies no withholding tax on dividends, and dividends are not taxable in any shareholder’s hands, resident or not. Interest is also paid gross. The investor’s home country may still tax the dividend.
Sources
All figures should be checked against the primary government sources below.
- Inland Revenue Department — 2026-27 Budget tax measures: allowances, one-off reduction, stamp duty — ird.gov.hk
- Inland Revenue Department — 2026 Policy Address tax measures on individuals — ird.gov.hk
- Inland Revenue Department — salaries tax computation, progressive and standard rates — ird.gov.hk
- Inland Revenue Department — salaries tax for people coming to work in Hong Kong, 60-day rule — ird.gov.hk
- Inland Revenue Department — profits tax rates and territorial principle — ird.gov.hk
- Inland Revenue Department — foreign-sourced income exemption regime — ird.gov.hk
- Inland Revenue Department — tax certainty scheme for onshore equity disposal gains — ird.gov.hk
- Inland Revenue Department — family-owned investment holding vehicles — ird.gov.hk
- Inland Revenue Department — global minimum tax and Hong Kong minimum top-up tax — ird.gov.hk
- Inland Revenue Department — ad valorem stamp duty rates — ird.gov.hk
- Inland Revenue Department — brief guide to taxes: property tax, stock stamp duty, estate duty — ird.gov.hk
- Inland Revenue Department — hotel accommodation tax — ird.gov.hk
- Inland Revenue Department — business registration fee and levy — ird.gov.hk
- Inland Revenue Department — comprehensive double taxation agreements — ird.gov.hk
- Inland Revenue Department — residency for tax purposes — ird.gov.hk
- Hong Kong SAR Government — abolition of demand-side management measures, 28 February 2024 — info.gov.hk
- Hong Kong SAR Government — the Chief Executive’s 2026 Policy Address — policyaddress.gov.hk
- Mandatory Provident Fund Schemes Authority — mandatory contributions for employees and self-employed persons — mpfa.org.hk
- Labour Department — abolition of the MPF offsetting arrangement — labour.gov.hk
- Rating and Valuation Department — progressive rating system and Government rent — rvd.gov.hk
- Customs and Excise Department — dutiable commodities and duty rates — customs.gov.hk
- Civil Aviation Department — air passenger departure tax — cad.gov.hk
- InvestHK — New Capital Investment Entrant Scheme investment requirements — newcies.gov.hk
- Immigration Department — Top Talent Pass Scheme — immd.gov.hk
- Companies Registry — company re-domiciliation regime — cr.gov.hk
- Census and Statistics Department — year-end population 2025 — info.gov.hk
- Council of the European Union — EU list of non-cooperative jurisdictions, 17 February 2026 update — consilium.europa.eu
- FATF — jurisdictions under increased monitoring, 19 June 2026 — fatf-gafi.org
- Hong Kong Monetary Authority — Linked Exchange Rate System and daily exchange rates — hkma.gov.hk
USD figures are indicative conversions at ~US$1 = HK$7.84 (Hong Kong Monetary Authority end-of-day rate, 31 August 2026) and ~€1 = US$1.16 (HKMA cross rate, same date), and rounded. The Hong Kong dollar is pegged to the US dollar under the HKMA’s Linked Exchange Rate System, which holds it between HK$7.75 and HK$7.85, so these conversions move very little.
Last verified: 19 September 2026.
This is general information, not personal tax or legal advice. Tax outcomes depend on your specific facts; consult a qualified Hong Kong tax adviser before acting.
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