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FAQ > Setting Business in Hong Kong > A02

Q: What is the characteristic of Hong Kong the tax system? View : 113
A:

Hong Kong has a simple, predictable and low tax system. The city only imposes three direct taxes, and filing taxes is straightforward.
According to the 2014 Paying Taxes* study of 189 economies, Hong Kong has one of the most tax-friendly economies in the world. Why? The city only imposes three direct taxes and has generous allowances and deductions which reduce your taxable amount, simple tax system makes taxation process easier

• Profits tax is capped at 16.5 percent
• Salaries tax is a maximum of 15 percent
• Property tax is 15 percent

More important are the taxes that Hong Kong does not impose:

• No sales tax or VAT/ Withholding tax / Capital gains tax / Tax on dividends / Estate tax

Free trade port

Hong Kong is known for its free port status and easy customs procedures. Duty is paid on very few products, for example, tobacco. One major recent change has made the import of wine and beer duty free. This has encouraged a thriving wine import, export and storage business serving retail and individual buyers.

*Paying Taxes is a study commissioned by the World Bank and IFC which measures the ease of paying taxes across 189 economies worldwide. It covers both the cost of taxes and the administrative burden of tax compliance.

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