HK Tax Tools

HK Profits Tax Calculator

Calculate your Hong Kong profits tax using the two-tiered tax rate system. Supports both incorporated (limited companies) and unincorporated businesses (sole proprietors and partnerships).

Input Details

Enter your assessable profits after deducting allowable expenses

Two-Tiered Tax Rates (2018/19 onwards)

  • First HK$2,000,000: 8.25%
  • Remainder: 16.50%
Tax Calculation Result

Total Tax Payable

HK$82,500

Effective Rate: 8.25%

Tax Breakdown

First Tier (8.25%)HK$82,500

On HK$1,000,000 of profits

Assessable ProfitsHK$1,000,000
Tax at First TierHK$82,500
Tax at Second TierHK$0
Total Tax PayableHK$82,500

About Hong Kong Profits Tax

Hong Kong operates a territorial tax system, meaning only profits sourced in Hong Kong are subject to profits tax. The two-tiered profits tax rates regime was introduced in the year of assessment 2018/19.

Two-Tiered Tax Rates

  • Corporations: 8.25% on the first HK$2 million of assessable profits, and 16.5% on any profits above that amount.
  • Unincorporated businesses: 7.5% on the first HK$2 million, and 15% on the remainder.

Important Notes

  • Only one entity within a group of connected entities can benefit from the two-tiered rates.
  • The reduced rate does not apply to assessable profits derived from a trade, profession, or business carried on by a corporation outside Hong Kong.

Frequently Asked Questions

What are assessable profits?

Assessable profits are your total income from business operations in Hong Kong, minus allowable deductions such as business expenses, depreciation allowances, and approved charitable donations.

When is profits tax due?

Profits tax returns are typically issued in April each year. The filing deadline depends on your accounting year-end date, usually ranging from 1 to 3 months after receiving the return.

Can I use the two-tiered rates if I have multiple companies?

Only one entity within a group of connected entities can elect to use the two-tiered rates. Connected entities must nominate which entity will benefit from the reduced rate.