's simple and low tax system is a great attraction to foreign investors. This low fiscal burden for all, domestic or international players, corporate and individuals alike makes Hong Kongattractive.
In fact low tax is the most cited reason for regional offices to set up in Hong Kong! This tax regime makes Hong Kongone of the lowest tax environments among developed economies.
Hong Kongoperates a territorial basis of taxationunder which taxes are only imposed on profits or income with a Hong Kongsource. Foreign-sourced income is not taxable whether if remitted to Hong Kongor not.
The Inland Revenue Department is responsible for tax matters in Hong Kong. Hong Kong has a different tax regime and is treated as completely separate to the Mainland of China. Hong Kong does not remit any tax to the Mainland of China.
Hong Kong's fiscal year runs from 1 April to 31 March.
The principal direct taxes are profits tax on businessprofits, salaries tax on salaries and property tax on income from property.
Hong Kong does not have any capital gains tax, withholding tax in dividends and interest, inheritance tax, value added tax and collection of social security contributions. Few items attract duty.
