The tax system under Hong Kong Inland Revenue Ordinance is relatively simple. There are three distinct and separate headings under which tax is levied:
Profits Tax (Current Tax Rate 2015/16: 16.5%)
Corporations, partnerships, trustees and bodies of persons carrying on any trade, profession or business in Hong Kong are chargeable to tax on all profits (excluding profits arising from the sale of capital assets) arising in or derived from Hong Kong from such trade, profession or business.
Salaries Tax (Current Tax Rate 2015/16: 15%)
In general terms, this tax is imposed on all income arising in or derived from Hong Kong from an office, employment or pension. In deciding whether income “arises in or is derived from Hong Kong”, it is necessary to establish where the employment, for example the source of income, is located.
Property Tax (Current Tax Rate 2015/16: 15%)
Property tax is levied on the owners of real estate which is situated in Hong Kong. A corporation letting property in Hong Kong is regarded as carrying on business in Hong Kong and should be subject to profits tax in respect of its property income.