Hong Kong Fact-File Part 3:
Individual Business International Taxation

3.2 Hong Kong Individual Business Withholding Taxes

For the most part there are no withholding taxes as such in Hong Kong, however, under certain circumstances, a Hong Kong based company will have to deduct withholding taxes on royalty payments (at rates of 1.65%, 4.95% or 16.5%, depending on the payee).

Sportsmen/women and entertainers are subject to a withholding tax of 15% of their earnings. In the case of the performance fee being paid to an agent acting on behalf of a sportsperson or entertainer, the agent is responsible for withholding the appropriate amount from the payment to their client.

Tax credits on foreign income

Double taxation is not normally a problem for Hong Kong-based businesses and individuals, due to the territorial nature of the tax system.

However, where a resident of a country which taxes worldwide income earns income in Hong Kong, a deduction for foreign tax paid is granted.

Individuals must be resident in Hong Kong in the year of assessment and may claim the credit within two years of paying the tax. The maximum amount to be claimed is equivalent to the tax due in Hong Kong.

Withholding tax on international purchases

There are no withholding taxes in Hong Kong for international purchases.

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Fact-File

Part 1: Hong Kong Business Formation for Individuals

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