Financial Tools
Profits Tax Calculator
Calculate Hong Kong profits tax under the two-tiered rates system for limited companies, sole proprietorships, and partnerships.
Input
Entity Type
Limited Company Two-Tiered Rates
Results
Profits Tax Payable
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Effective rate —
Tax Breakdown
Profits Tax Essentials
Two-Tiered Profits Tax
Implemented from the 2018/19 assessment year. The first HK$ 2M of profit is taxed at a lower rate (8.25% for limited companies, 7.5% for sole proprietorships/partnerships), with the remainder taxed at the standard rate (16.5% / 15%).
Company vs Sole Proprietorship
Limited companies pay 16.5% (8.25% on first HK$ 2M), while sole proprietorships and partnerships pay 15% (7.5% on first HK$ 2M). However, limited companies must also consider director remuneration, dividend arrangements, and other tax considerations.
Deductible Expenses
When calculating assessable profit, you can deduct business-related expenses: rent, salaries, MPF contributions, depreciation, bad debts, etc. Keep receipts for at least 7 years.
Filing Deadlines
Profits tax returns are typically issued in April each year. Limited companies generally have 1 month to file; sole proprietorships and partnerships have 3 months. Late filing can result in a HK$ 10,000 penalty.