10 Tips to Assist Your Hong Kong Company in Calculating Profits, Taxes, and Saving Money

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Taxation has become a hot topic among Hong Kong company owners since the Hong Kong Inland Revenue Department (the Hong Kong tax administration) began sending out Tax Return letters to taxpayers in April.

If you own a business in Hong Kong, you must file the following tax returns:

You must file a profit tax return and an employer's return on behalf of your registered business as a corporate taxpayer.

Individual Salary Tax Return

Whether or not you have filed your returns, it is a good idea to review the fundamentals of the Hong Kong tax system and its most recent revisions in order to maximize your tax savings.

Here are the 10 Profits Tax Calculation & Savings Tips for HK Businesses:

  1. The deadline for filing a profit tax return varies each Hong Kong company.
  2. Director’s Salaries are subject to the Director’s Salaries Tax.
  3. Dividends to shareholders must be withdrawn when the profits tax has been paid.
  4. All income taxes are subject to a provisional tax.
  5. Some business profits are exempt from taxation.
  6. Not all business expenses are tax deductible.
  7. Profits Tax Allowances Are Limited to Specific Business Types
  8. In the age of borderless commerce, determining the location of profits is difficult.
  9. The Deficit Encourages Tax Savings
  10. Prepare for the Tightened Ruling if You Want to Pay Tax in Hong Kong.

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