As a general rule, taxation is only levied on income or transactions having a direct connection with Hong Kong. The concepts of residence, domicile or citizenship have little, if any, relevance. Taxation is based on the ‘territorial’ concept.
Direct Taxation
There are three distinct taxes designed to tax income derived from Hong Kong:
Profits Tax
Salaries Tax
Property Tax
There is no taxation of capital gains on transfer or on gifts.
Indirect Taxation
There are a few indirect taxes and Stamp Duty on transfers of shares in Hong Kong companies and of interests in land and buildings located in Hong Kong.
Tax Treaties
Hong Kong has Double Tax Treaties with Austria, Belgium, Brunei, Czech, France, Hungary, Ireland, Japan, Liechtenstein, Luxembourg, Mainland China, The Netherlands, New Zealand, Spain, Thailand, United Kingdom and Vietnam. In addition, the Double Tax Treaties with Indonesia, Kuwait, Malta, Portugal and Switzerland will shortly be in force. The expansion of the tax treaty network enhances the development of international trading amongst Hong Kong and its overseas treaty counterparts.
