Hong Kong is a low tax environment for both business and individuals. As well as offering low tax rates, the system is simple and transparent. Hong Kong has no VAT/GST, capital gains tax, capital transfer tax or estate duty, and no withholding tax on dividends or interest. Interest received is also often non-taxable.
In addition, Hong Kong operates on a source, or territorial, basis, meaning that income not arising in or derived from Hong Kong should not be taxable in Hong Kong.
The main current rates of tax in Hong Kong are 16.5% for corporate tax and 15% (the maximum rate, or cap – the actual effective rate may be lower, and in addition there are personal allowances) for personal income tax.