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Hong Kong Tax System

The companies in Hong Kong are not treated as resident or non-resident companies, the principle of taxation by territory is applied. That means that Hong Kong companies are subject to taxation only in cases where the income  was received from a source located in Hong Kong. If the company had no activity on the territory of Hong Kong and did not receive income from the sources located in Hong Kong, they are not the subject of taxation.

The Inland Revenue Ordinance is the main fiscal legislative act. It provides for imposition of three types of taxes: the tax on profit,  on salary, and on immobility.

Such taxes as VAT, the tax on sales, the taxes withheld at the source of payment of income in form of dividends, and interest, are absent in Hong Kong.