Tax system in Hong Kong
Hong Kong does not tax a person's total income. Employment income is taxed under salaries tax, business profits under profits tax and rental income under property tax. The system is territorial, so Hong Kong generally taxes Hong Kong-sourced income and profits rather than worldwide income.
The headline personal and business taxes are still competitive, but Hong Kong is not a zero-compliance jurisdiction. There is no VAT or GST, there is mandatory MPF for covered employees and self-employed persons, and the 2026-27 Budget proposes higher salaries tax allowances from year of assessment 2026/27 onward, subject to enactment.
Tax rates at a glance
- Salaries tax
- 2% - 17%Progressive
- Standard rate cap
- 15% / 16%
- Foreign-sourced income
- 0% / source-based
- Capital gains tax
- 0%
- Dividend tax
- 0%
- VAT / GST
- 0%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
Remote foundersHigh earnersInvestorsDigital nomadsHolding companies
Watch out for
- Hong Kong's territorial system does not exempt foreign tax residence claims elsewhere. Another country can still tax your salary, dividends, gains or business profits if you are resident there.
- No VAT or GST does not mean no transaction taxes. Property deals, share transfers, stamp duty, excise duties and rates can still matter.
- The 2026-27 Budget proposes a one-off 100% reduction of final salaries tax and profits tax for 2025/26, capped at HKD 3,000, plus higher allowances from 2026/27, but those measures still depend on enactment.
Frequently asked questions
Is Hong Kong a low-tax jurisdiction?
Yes. Hong Kong is low-tax for individuals and companies because it uses territorial taxation, has no VAT or GST, no wealth tax and no inheritance tax, and it does not levy dividend withholding tax.
Which taxes apply in Hong Kong?
The main taxes are salaries tax, profits tax, property tax and stamp duty. Employees and self-employed people also need to plan for MPF contributions and any foreign tax exposure.
Is Hong Kong good for founders and investors?
It can be, especially if the business has real Hong Kong or Asia nexus. The best fit depends on source of income, offshore claim evidence, banking, MPF, transfer pricing and where the owners are tax resident.