HK 2028 Profits Tax
HK 2028 Profits Tax: 8.25% first HK$2m, 16.5% above (corporate). Unincorporated 7.5%/15%. R&D 300% deduction. Patent box (innovation) 5% effective rate from 2024.
| Profit | — |
| 2028 Profits Tax | — |
| Effective rate | — |
Hong Kong 2028 Profits Tax uses two-tier rates: 8.25% on first HK$2m corporate profit, 16.5% above. Unincorporated (sole prop, partnership): 7.5% / 15%. Among lowest corporate tax rates in developed economies. R&D super-deduction 300% on qualifying expenditure. Patent Box 5% effective rate on IP income.
Two-Tier System
SME-friendly: first HK$2m profit taxed at half rate (8.25% corp). Restricted to one entity per group — anti-fragmentation rule. Saves HK$165,000/year for SMEs. Above HK$2m: standard 16.5%.
R&D + Patent Box Incentives
R&D super-deduction: 100% (Type A) or 300% (Type B — local qualifying R&D) of expenditure. Patent Box (2024+): 5% concessionary rate on profits attributable to qualifying patents — competitive with Singapore + Ireland.
Foreign Source Exemption
HK only taxes income with HK source. Offshore claims allowed for foreign source income — long history of advance ruling. FSIE regime (2023+) added economic substance + nexus requirements for passive income.
Last updated May 2026. Sources: IRD HK.