HK Profits Tax Calculator 2026-27
Calculate your Hong Kong profits tax for the 2026/27 year of assessment. Enter your assessable profits, choose corporation or unincorporated business, and select whether the entity elects the two-tier concession. The calculator applies official IRD two-tier rates — 8.25%/16.5% for corporations and 7.5%/15% for unincorporated businesses — and shows a side-by-side comparison with and without the two-tier election. Source: ird.gov.hk — Profits Tax.
Tax Calculation Breakdown
| Assessable profits | HK$0 |
| First HK$2,000,000 | HK$0 |
| Remainder | HK$0 |
| Total profits tax payable | HK$0 |
Two-Tier vs Flat-Rate Comparison
What Is Hong Kong Profits Tax?
Hong Kong profits tax is a tax levied on the assessable profits of any person — corporation, partnership, trustee, or sole proprietor — carrying on a trade, profession, or business in Hong Kong. Only profits arising in or derived from Hong Kong are taxable under the territorial source principle; offshore-sourced income falls entirely outside the charge. There is no capital gains tax in Hong Kong — gains from the sale of capital assets such as shares or properties are not subject to profits tax, provided the assets were genuinely held as capital rather than trading stock. The year of assessment runs from 1 April to 31 March; the 2026/27 year covers 1 April 2026 to 31 March 2027. Source: Inland Revenue Department — Profits Tax.
Two-Tier Profits Tax Rates for 2026-27
The two-tier profits tax regime took effect from the year of assessment 2018/19 and applies to both corporations and unincorporated businesses. Only the first HK$2,000,000 of assessable profits benefits from the reduced lower-tier rate; all profits above that threshold are charged at the standard rate.
| Entity Type | First HK$2M | Remainder |
|---|---|---|
| Corporation (limited company) | 8.25% | 16.5% |
| Unincorporated business (sole proprietor / partnership) | 7.5% | 15% |
If no two-tier election is made — or if the entity is not eligible because a connected entity has already nominated itself — the flat standard rates apply: 16.5% for corporations and 15% for unincorporated businesses across all assessable profits.
Two-Tier Election Rules and Connected Entities
The two-tier concession is designed for small and medium enterprises. To prevent a group from splitting profits across multiple entities to multiply the benefit, the law restricts the election to one entity per group. Two entities are "connected" if one controls the other or both are controlled by the same person(s). Where connected entities exist, they must nominate which single entity claims the two-tier rates; all others pay the flat standard rate on 100% of their assessable profits. The nomination is made in the profits tax return (BIR51 for corporations, BIR52 for partnerships, BIR54 for unincorporated businesses) for the relevant year of assessment. For newly incorporated companies or startups without a connected group, no nomination is needed — the two-tier rates apply automatically.
How Hong Kong Profits Tax Is Assessed and Paid
The IRD issues a profits tax return typically 18 to 21 months after the end of the basis period. Most corporations with a 31 March year-end receive BIR51 returns in April each year. The return is due within one month of issue, although tax representatives obtain extended filing deadlines in bulk. Tax assessed is due within one month of the notice of assessment. Provisional profits tax — an advance based on the preceding year's profits — is also charged concurrently. You may apply to hold over provisional profits tax if your assessable profits for the current year are expected to be less than the preceding year's figure, or if you have grounds of objection to the assessment. Objections must be lodged within one month of the date of the notice of assessment.