Source: https://rivet.global/blog/hong-kong-profits-tax-two-tier-rates-for-trading-companies
Published: 2026-06-25 · Updated: 2026-06-25 · By Alexia M.

# Hong Kong profits tax: two-tiered rates and offshore claims explained

Hong Kong profits tax for companies: the 8.25% and 16.5% two-tiered rates, the territorial basis, offshore claims and the bank records they depend on.

## Key takeaways

- Hong Kong corporations pay profits tax at 8.25% on the first HK$2 million of assessable profits and 16.5% on the rest.
- Only one entity in a group of connected entities can use the lower tier.
- Hong Kong taxes profits sourced in Hong Kong; profits from operations carried out abroad can be offshore and not taxable.
- An offshore claim depends on evidence of where contracts were negotiated and the work done, and bank records are part of that evidence.

"Hong Kong corporate tax rate for non residents" sits in Google's suggestions next to "Hong Kong corporate tax rate 2026". The short answer is the same for everyone. The longer answer depends on where your profits come from.

## The rates

| Assessable profits | Corporation rate |
|---|---|
| First HK$2 million | 8.25% |
| Above HK$2 million | 16.5% |

For HK$3 million of assessable profits: HK$2 million at 8.25% is HK$165,000, plus HK$1 million at 16.5% is HK$165,000. Total HK$330,000. Only one entity among connected entities can use the 8.25% tier.

## Territorial basis

Hong Kong taxes profits that arise in or are derived from Hong Kong. A trading company that buys from a factory in Vietnam and sells to a buyer in Germany, with the deal negotiated and concluded outside Hong Kong, may have offshore profits. The IRD looks at the operations that produced the profit, not where the company is registered or where the money lands.

## Why records decide offshore claims

The IRD asks for evidence: who negotiated, where contracts were signed, where staff worked, how goods moved. Payment records help tell the story. Clean records show buyer, supplier, currency and dates for each trade. A mixed account with personal and business payments makes the claim harder to support.

## Practical steps

1. Keep each trade's contract, invoices, shipping documents and payments together.
2. Pay suppliers and receive from buyers in the company's own name.
3. Record where each deal was negotiated as it happens.
4. Get advice from a Hong Kong tax representative before filing an offshore claim.

## Paying into Hong Kong: the local rail

| What | Detail |
|---|---|
| Local rail | Faster Payment System (FPS) |
| Run by | Hong Kong Interbank Clearing Limited, under the HKMA |
| Settlement | Seconds, 24/7, in HKD or CNY |

Source: [HKMA: Faster Payment System](https://www.hkma.gov.hk/eng/key-functions/international-financial-centre/financial-market-infrastructure/faster-payment-system-fps/). Checked when this guide was last updated; the scheme's own page has the current figures.

## Where Rivet fits

Rivet keeps every receipt and payout on one ledger, with the counterparty, currency, amount and date, and exports statements and receipts for your accountant. USD comes on Starter, EUR and GBP on Growth, HKD and 25 more currencies on Scale. Check our eligibility list for Hong Kong companies. Rivet is not a bank; regulated partner institutions hold the funds. See [Hong Kong company bank account opening](/blog/hong-kong-company-bank-account-opening).

## Questions

### What is the Hong Kong corporate tax rate for non-residents?

The same two-tiered rates apply to any company carrying on business in Hong Kong with Hong Kong-sourced profits, wherever its owners live.

### Does Hong Kong tax foreign income?

Hong Kong uses a territorial basis. Profits sourced outside Hong Kong are generally not taxed. A refined foreign-sourced income exemption regime covers certain passive income received by multinational group entities.

### How do I make an offshore claim?

You claim on the profits tax return and support it with evidence of where profit-generating activities happened: contracts, emails, travel records, and where staff and decision makers were.

### When is the profits tax return due?

The IRD issues returns in April each year. The due date depends on the company's accounting date code; extensions apply to tax representatives under the block extension scheme.