Accounting & Tax
Hong Kong Accounting and Tax Filings
From bookkeeping and financial statements through statutory audit and Profits Tax filing, we support the accounting work needed to keep a Hong Kong company running — locally, end to end. Hong Kong bookkeeping must follow local accounting rules and company law, and weak processes can lead to penalties. Hiring and retaining local finance staff is often hard, so many companies stabilise quality and cost through outsourcing. This page covers service scope and sample fees, in-house bookkeeping notes, and a plain map of the main taxes — with the aim of fewer deadline and document misses, and less day-to-day finance load.
- Scope: bookkeeping, full accounting support, and coordination from audit through tax filing
- Fee guides: bookkeeping by entry count (e.g. under 10/month from HK$3,800), sample audit for a trading firm HK$13,000, full accounting support from HK$6,000/month
- If you keep books in-house: retention (7 years), chart design, related-party points to watch before audit
- Taxes: eight charges most businesses meet, plus an Asia comparison table
From bookkeeping to tax filing
After incorporation, a Hong Kong company sets its first year-end, then typically follows bookkeeping and statements, audit, shareholder approval, and tax filing. The same cycle continues each year.
- 1Set the year-end (first year-end usually within about 15–18 months of incorporation)
- 2Bookkeeping and preparation of financial statements
- 3Statutory audit by a CPA / audit firm
- 4Shareholder approval of audited statements
- 5Profits Tax filing
Audit support
In Hong Kong, companies are generally required to have a statutory audit. After the financial statements are prepared, an auditor reviews them and issues an audit report — which is also needed for Profits Tax filing. Timing matters so the work finishes before filing deadlines. We act as your coordination point from audit through tax filing.
Fee example
Example: Trading business / annual turnover HKD 10 million, ~40 bank movements per month Audit and tax filing (support included): HKD 13,000
Typical timeline is about 2–3 months, depending on transaction volume and document readiness. Final fees are quoted case by case.
Bookkeeping and accounting support
Our bookkeeping support goes beyond data entry — it includes preparing financial statements in line with Hong Kong accounting rules. We flag issues early so audit and tax filing can move smoothly. Fees are based on the number of journal entries (classifying receipts and vouchers by account). Methods vary by firm, so please request a free quote first.
Scope
Journal entries / preparation of financial statements
Fee example (by entry volume)
| Monthly entry count | Monthly bookkeeping | Annual bookkeeping |
|---|---|---|
| Under 10 | From HK$3,800 | From HK$4,800 |
This is an indicative example only. Final pricing depends on entry volume and document condition.
Full accounting support (for day-to-day finance ops)
To outsource part or all of day-to-day finance work, use accounting support. We operate as your finance team for the agreed scope. Tasks outside the list below can still be discussed.
- Accounting support fee
- From HKD 6,000 / month
- Scope
- Bookkeeping plus part or all of broader accounting operations
- Typical tasks
- Invoice issuance / AR & AP management / cheque issue and deposits / bank payment setup / payroll & MPF / employer’s return / personal tax return support, and more
In-house bookkeeping (differences from Japan)
Day-to-day journalising is similar to Japanese practice, so keeping books in-house can cut outsourcing cost. Final statements still need to follow Hong Kong standards (HKFRSs and related frameworks). Points that often cause audit issues are listed below.
Source documents and retention
Keep invoices, receipts, and bank records that can objectively explain each transaction. Under the Inland Revenue Ordinance, sufficient business records must generally be kept for at least seven years after the transactions are completed. Missing or weak support can create problems in a review.
Chart of accounts
Avoid dumping unclear spending into miscellaneous or director suspense accounts. Where deductibility is uncertain, use separate accounts so the trail stays reviewable.
Entertainment and similar costs
Deductibility turns on whether the expense was incurred in producing assessable profits. Private or non-business entertainment is not allowed. Keep the receipt plus counterparty, purpose, and business link.
Contracts
For service, technical, or outsourcing agreements, keep clear pricing rationale and deliverables. Oral-only arrangements are hard to defend in audit or tax reviews.
Balance confirmations
Reconcile cash, bank, inventory, and receivables/payables regularly and keep evidence. Long-outstanding balances need a clear reason and settlement plan.
Fraud and enquiry risk
Sham trades, artificial profit shifting, and money laundering attract severe penalties. Overstated subcontracting, entertainment, purchases, or FX losses — and sharp swings in cost ratios — can also trigger enquiry.
If you have overseas or related-party dealings
Cross-border related-party activity needs transfer-pricing and AML-aware records.
Related-party transactions
Intercompany deals are often tested against arm’s-length pricing. Keep contracts and the pricing rationale.
Impairment
Do not leave assets overstated. If auditors challenge a balance, adjust it or provide objective valuation support.
Provisions
When providing for receivables or inventory, meet the accounting criteria and document the calculation. For tax, general provisions are often not immediately deductible.
Royalties
IP charges depend on the contract, computation method, and payee location. For non-resident payees, check withholding / deemed assessable profits before booking.
Once in-house books and statements are ready, move on to audit, the AGM, and tax filing. Ask us anytime if you want to switch to outsourced bookkeeping or audit support.
Hong Kong tax overview
Eight main taxes and charges
These eight taxes and public charges are the ones most businesses and property owners meet in Hong Kong. The first three are income taxes. There is no inheritance tax, gift tax, VAT/GST, or resident-tax equivalent. The framework is simpler than Japan’s, but specific treatment still depends on each case.
1. Profits Tax
Tax on Hong Kong–sourced business profits. Corporations generally use two-tier rates: 8.25% on the first HK$2 million of assessable profits and 16.5% on the remainder (unincorporated businesses: 7.5% / 15%).
2. Salaries Tax
Tax on Hong Kong–sourced employment income and similar remuneration. Liability is the lower of progressive rates (up to 17%) and the two-tiered standard rates (15% on the first HK$5 million of net income, 16% on the remainder). Personal return support is available.
3. Property Tax
Tax on rental and similar income from Hong Kong property, generally at 15% on the net assessable value after statutory deductions. Rental carried on as a business may instead fall under Profits Tax in some cases.
4. Stamp Duty
Applies to property transfers and leases, and to transfers of Hong Kong company shares, among other instruments. Property sales are mainly subject to ad valorem stamp duty (AVD) by value band. Leases use term-based rates. Stock transfers are commonly 0.1% from each side (0.2% combined). Relief may apply for qualifying reorganisations.
5. Business Registration (BR)
Anyone carrying on business in Hong Kong needs a business registration and must pay the government BR fee on a recurring basis. Fee waivers or reductions are sometimes announced. Payment can cover one or three years. Always check the latest government rate.
6. Rates
A property occupation charge based on rateable value. Non-domestic properties are generally charged at 5%. Domestic properties may use progressive charges (5%–12%) depending on rateable value. Temporary concessions are sometimes offered.
7. Government Rent
For many properties, government rent is charged at 3% of the rateable value. It is separate from rates, and some properties are billed for both.
8. Duties / customs
Hong Kong is largely a free port, but excise duties apply to limited items such as liquor, tobacco, hydrocarbon oil, and methyl alcohol. There is no general consumption tax (VAT/GST).
Asia tax comparison (headline rates)
Indicative highest or standard rates for Hong Kong, Japan, Mainland China, and Singapore. Effective rates differ by deductions, reliefs, and industry. Figures are general 2026 guidance only.
| Item | Hong Kong | Japan | China | Singapore |
|---|---|---|---|---|
| Corporate / Profits Tax | 8.25% / 16.5% (two-tier) | ~30% (effective guide) | 25% | 17% |
| Royalty taxation | Yes | Yes | Yes | Yes |
| Salaries / income tax (top) | 17% | ~55% (incl. local) | 45% | 24% |
| Deemed income rules | Yes | Yes | Yes | Yes |
| Dividend / interest tax | Generally no | ~20% | Often 10% | Generally no |
| Capital gains tax | Generally no | ~20% | Yes | Generally no |
| Property income tax | Yes | Yes | Yes | Yes |
| Stamp duty | Yes | Yes | Yes | Yes |
| Property rates / local property tax | Yes | Yes | Yes | Yes |
| Excise / customs | Limited items | Many classes | Many classes | Limited items |
| VAT / GST / consumption tax | None | 10% | Standard 13% (VAT) | 9% (GST) |
| Gift tax | None | Up to ~55% | None | None |
| Inheritance / estate tax | None (estate duty abolished) | Yes | None | None |
This page is a general overview, not tax advice. Rates, concessions, and eligibility change. Confirm details with the tax authority or a qualified adviser for your case.
Talk to us about accounting and tax
Tell us whether you need bookkeeping, full accounting support, audit support, Profits Tax filing, or a combination.