VAT in Hong Kong for Foreign Investors

No Value-Added Tax (VAT) in Hong Kong

• Hong Kong does not impose Value-Added Tax (VAT) or Goods and Services Tax (GST) on businesses or individuals.
• This applies to both local and foreign investors operating in Hong Kong.

Tax Structure in Hong Kong

• Instead of VAT, Hong Kong has a simple and low-tax regime that includes:
  • Profits Tax:
    • 8.25% on the first HKD 2 million of assessable profits
    • 16.5% on profits exceeding HKD 2 million (for corporations)
    • Salaries Tax: Progressive rates up to 17%
    • Stamp Duty: Applicable to certain transactions, such as real estate and stock transfers
• No VAT on Imports and Exports
  • Imports into Hong Kong are generally free of customs duties and VAT, except for certain dutiable goods (e.g., alcohol, tobacco, hydrocarbon oil).
  • Exports from Hong Kong do not attract VAT or GST, making it an attractive location for international trade.
• Impact on Foreign Investors
  • Businesses operating in Hong Kong do not need to register for VAT.
  • Companies do not have to charge VAT on sales or reclaim input VAT on purchases.
  • Cross-border transactions involving Hong Kong are not subject to VAT, simplifying international business operations.

Conclusion