Relocation tax guideMoving to Hong Kong SAR: Taxes for Expats 2026
Hong Kong taxes on a territorial basis - only Hong-Kong-sourced income is taxed, so foreign income is generally not taxed at all. Salaries tax is low - a standard rate of 15% on the first HKD 5 million of net income and 16% above - and there is no capital gains tax, no VAT, and no estate duty (abolished 2006). What matters is the source of your income, not how many days you spend there.
Hong Kong's tax appeal rests on two pillars: a strictly territorial system that leaves foreign income untaxed, and a low salaries tax - a standard rate of 15% on the first HKD 5 million of net income and 16% above. There is no capital gains tax, no sales tax, and no estate duty. This guide explains how the source-based system works and what an arriving professional actually pays, with the headline rates from the country breakdown.
Hong Kong SAR: key tax rates
| Tax | Rate | Source |
|---|---|---|
| Corporate income tax | 16.5%Two-tiered profits tax: 8.25% on the first HKD 2m of assessable profits, 16.5% above (15% for unincorporated businesses) | PwC Worldwide Tax Summariesas of 2025-12-31 |
| Top personal income tax | Up to 16%Salaries tax; standard-rate cap 15% on the first HKD 5m of net income, 16% above; progressive rates also apply | PwC Worldwide Tax Summariesas of 2025-12-31 |
| VAT / GST (standard) | NoneNo VAT or GST | PwC Worldwide Tax Summariesas of 2025-12-31 |
| Capital gains | No CGTCapital gains are not taxed | PwC Worldwide Tax Summariesas of 2025-12-31 |
| Inheritance / wealth tax | NoNo estate duty (abolished 2006) | PwC Worldwide Tax Summariesas of 2025-12-31 |
When you become a tax resident
Hong Kong taxes by source of income, not residence. Salaries tax applies to income from a Hong Kong employment or work performed in Hong Kong; foreign-sourced income is outside the charge. A visitor present 60 days or fewer in a year is generally exempt from salaries tax on services here. There is no worldwide-income concept to trigger.
Source: PwC Worldwide Tax Summaries - Hong Kong SAR (Residence) (as of 2026-06-24).
Territorial taxation: foreign income untaxed
Hong Kong taxes only income arising in or derived from Hong Kong. There is no taxation of foreign-sourced income for individuals, and no general worldwide-income regime - so investment income, gains, and earnings sourced outside Hong Kong typically fall entirely outside Hong Kong tax. This source principle, not a day count, is the heart of the system.
The trade-off is that Hong Kong employment income is taxed even for short stays once you cross the visitor threshold, and determining the source of employment income can be technical for people who work partly outside Hong Kong.
Low salaries tax, no CGT, no estate duty
Salaries tax is charged on a progressive scale (up to 17%) but the total is limited by a standard rate on net income - 15% on the first HKD 5 million and 16% above - so the effective burden on employment income stays low by international standards. There is no capital gains tax, no VAT or sales tax, and estate duty was abolished in 2006 - so neither investment gains nor estates are taxed.
Before you move: what to weigh
- What matters is the source of income, not days spent - foreign-sourced income is untaxed, but Hong Kong employment income is taxed.
- Salaries tax is limited by a standard rate of 15% on the first HKD 5 million of net income and 16% above; there is no capital gains tax, VAT, or estate duty.
- Source of employment income can be technical if you work partly outside Hong Kong - confirm the position.
- US citizens remain taxable by the US on worldwide income; note the US and Hong Kong have no comprehensive income-tax treaty.
Get this right for your situation
Cross-border tax turns on your specific facts. Find a tax professional who works with people moving to Hong Kong SAR.
Does Hong Kong tax foreign income?
Generally no. Hong Kong is territorial: it taxes only income arising in or derived from Hong Kong, so foreign-sourced income, investment income, and gains are typically outside Hong Kong tax altogether. There is no worldwide-income regime. Hong Kong employment income, by contrast, is taxed.
Does Hong Kong have capital gains tax?
No - Hong Kong has no capital gains tax, no VAT or sales tax, and no estate duty (abolished in 2006). Gains that are really trading profits can be taxed as income, but genuine capital gains are not taxed. This, with the territorial system, is the core of Hong Kong's appeal.
How is Hong Kong salaries tax capped?
Salaries tax is charged on a progressive scale (up to 17%) but the total is limited by a standard rate on net income - 15% on the first HKD 5 million and 16% above. Foreign-sourced income is not taxed at all under the territorial system.
Informational only, not tax advice. Cross-border tax depends on your personal circumstances and changes often; figures are dated to their sources. Confirm your position with a qualified professional before moving or filing.
Important disclaimer
Informational only — not tax advice. This page summarises publicly available information about tax in Hong Kong SAR as of July 2026. Tax laws change, individual circumstances vary, and the application of any rule depends on your specific facts.
TaxProsRated does not provide tax, legal, accounting, or financial advice. Before acting on anything you read here, consult a qualified tax professional licensed in your jurisdiction (in the US: CPA, Enrolled Agent, or attorney; in the UK: CIOT- or ATT-qualified adviser; in Australia: TPB-registered tax agent; elsewhere: a locally-licensed equivalent). TaxProsRated, its operators, and its contributors disclaim all liability for action taken in reliance on this page.