Even with a simple tax regime Hong Kong SME owners still must work hard to ensure correct tax filings

Hong Kong’s well-deserved reputation as an easy-place-to-do-business doesn’t really cover its tax regime. Admittedly other parts of the world have more complicated tax filing procedures for small business owners, but SME owners in Hong Kong must also pay close attention to
their tax filings.

Here the taxes for businesses fall largely into two categories – Profits tax and Property tax.

Simply explained, the Profits Tax is on the profit you have made in a year from your Hong Kong registered business. This is a percentage of the taxable profit and is taxed according to two tiers – the first HK$2 million is taxed at 8.25%, and earnings above that are taxed at 16.5%.

Property Tax refers to a tax on any income derived from real estate, such as rent.

Now while this seems simple enough on the face of it, both these tax have many details under them that must be considered during annual returns filings. To know all of these do carry on and read our expanded Guide to HK tax for SME owners.