HKBSCLHong Kong Business Services Centre Limited
We help Hong Kong companies and cross-border groups handle profits tax returns, offshore profits claims, advance rulings, FSIE, related-party transactions and Inland Revenue Department enquiries. Each tax position is assessed against the actual business operations, contracts, people and transaction records.
Service snapshot
Best for
Hong Kong companies needing a routine profits-tax filing or separately scoped advice on complex or cross-border issues.
Your next step
Send the tax return or notice, filing deadline, latest accounts and a short transaction background. We will identify the correct path, records and quotation.
Our work covers profits tax compliance and non-standard corporate tax matters where the source of profits, group arrangements or supporting evidence requires closer review. Outcomes depend on the facts, applicable law and the Inland Revenue Department's assessment.
Ensuring your business adheres to all tax regulations and filing requirements.
Professional guidance on international tax matters and overseas expansion strategies.
Review the facts, filing history, evidence requirements and potential exposure before preparing a profits tax return or IRD response.
The place of incorporation, bank account or invoicing address does not by itself determine the source of profits. An offshore profits claim requires a fact-specific review of where and how the profit-producing activities took place, while specified foreign-sourced income may also fall within the FSIE regime.
We review the commercial facts and supporting records before recommending a filing position or response strategy.
Trace the profit-producing activities and organise contracts, orders, personnel, logistics and correspondence for an offshore profits claim and related IRD enquiries.
Assess whether a proposed transaction may be suitable for an advance ruling and prepare a complete statement of facts and supporting documents.
Review whether an overseas-incorporated or offshore company carries on business in Hong Kong and how its Hong Kong tax obligations should be addressed.
Review specified foreign-sourced interest, dividends, disposal gains and intellectual property income against the applicable FSIE conditions.
Map negotiations, contracting, fulfilment, service delivery and personnel locations to analyse the source of profits.
Review group service fees, loans, royalties, cost sharing and other controlled transactions for arm's-length and documentation requirements.
Examine ownership, control, management functions and connected entities, including eligibility for the two-tiered profits tax rates.
Consider the tax treatment and filing implications of reorganisations, business transfers, share disposals and carried-forward losses.
Prepare responses to estimated or additional assessments, objection notices, information requests and tax investigation correspondence.
Hong Kong generally applies a territorial source principle to profits tax. However, statutory deeming provisions, including FSIE, can bring specified amounts into charge even when they are foreign-sourced, so each case must be reviewed under the relevant rules.
The standard profits tax rate is 16.5% for corporations and 15% for unincorporated businesses. A two-tiered profits tax system is available for eligible enterprises.
Hong Kong does not impose general sales tax, value-added tax (VAT), or business tax commonly found in other jurisdictions.
Hong Kong applies a territorial basis of taxation, but an offshore profits claim is not automatic. The source of profits is determined from the actual profit-producing activities and supporting evidence, and specified foreign-sourced income may also be subject to the FSIE rules.
Under the two-tiered profits tax system, the profits tax rate for the first HK$2 million of assessable profits is reduced to enhance the competitive advantage of Hong Kong's tax regime.
| Entity Type | First HK$2 Million | Remainder |
|---|---|---|
| Corporations | 8.25% | 16.5% |
| Unincorporated Businesses | 7.5% | 15% |
The two-tiered rates apply to all entities with assessable profits in Hong Kong, except when an entity has one or more connected entities that have already been nominated for the two-tiered rates.
Every Hong Kong limited company will receive its first profits tax return approximately 18 months after incorporation. Regardless of whether the company has conducted business in Hong Kong, the tax return must be submitted with audited financial statements by the deadline (typically 3 months from issuance).
The first financial statements should be prepared within 18 months of incorporation, and annually thereafter. Companies must maintain accounting records for at least 7 years, as required by the Companies Ordinance.
We can act as your company's tax representative to help handle tax-related matters and communications with the tax authorities.
The Inland Revenue Department conducts sample checks on suspicious companies each year. Proper and careful handling is crucial to avoid and minimize potential losses and penalties.
A claim that profits are offshore or otherwise exempt must be supported by the relevant facts, tax rules and evidence. The treatment can differ for trading, services, investment income and entities within multinational groups.
Professional corporate tax filing services:
Comprehensive tax compliance support:
Fact-based support for complex filings:
A structured review keeps the filing position consistent with the underlying business records and identifies evidence gaps early.
Understand the entity, transaction, commercial objective, filing history and questions raised by the IRD.
Map the people, functions, contracts and transaction flow against the relevant Hong Kong tax rules.
Prepare the tax return position, computations, explanations and supporting document index for review.
Coordinate responses, clarify further questions and track statutory filing, objection and payment deadlines.
Practical answers to common Hong Kong profits tax and complex corporate tax questions.
No. Incorporation outside Hong Kong does not create an automatic exemption. The company must be reviewed against whether it carries on business in Hong Kong and where the relevant profit-producing activities took place.
The evidence depends on the business model, but commonly includes contracts, orders, negotiation records, staff and service locations, logistics records, emails and a complete transaction flow.
It may be considered for a proposed arrangement with material tax uncertainty. The application requires full disclosure of the relevant facts and documents, is subject to a fee and remains for the IRD to determine.
FSIE may apply to specified foreign-sourced income received in Hong Kong by a multinational enterprise entity carrying on a trade, profession or business in Hong Kong. The income type, economic substance and available exception or relief must be reviewed separately from the general source-of-profits analysis.
Generally, only one entity among connected entities may be nominated for the two-tiered rates. Ownership and control relationships should be reviewed before making the election.
Check the latest government and regulatory guidance relevant to this service before making filing, compliance, or planning decisions.
Read the IRD's official guidance on Hong Kong profits tax, chargeable persons, and filing obligations.
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Confirm the official two-tiered profits tax rates and eligibility rules for corporations and unincorporated businesses.
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Review the source principles the IRD applies when determining whether business profits arise in or are derived from Hong Kong.
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Check the official process, eligibility conditions, fees, and published rulings for advance ruling applications.
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Read the latest official guidance on Hong Kong's foreign-sourced income exemption regime for multinational entity groups.
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These links help connect the current topic with nearby company, tax, banking, and compliance support. They are not a substitute for professional advice on your actual circumstances.
Share the transaction background, tax notices and available records with us for an initial review of the filing position, evidence needs or IRD response.
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