A checklist for reduction of profits tax

Do you carry on a business or a trade? If no, you pay no tax. Click here for details.

Is your business or trade carried on in Hong Kong? If no, you pay no tax. Click here for details.

Do you earn profits from activities outside Hong Kong? If yes, such profits are not taxable. Click here for details.

Do you include capital receipts in your accounting profits? If yes, you should exclude them from assessable profits. Click here for details.

Do you purchase computer hardware or software? If yes, their cost is wholly deductible. Click here for details.

Do you purchase machinery or plant for manufacturing purpose? If yes, their cost is wholly deductible. Click here for details.

Do you incur expenditure on patent, trademark, design … etc.? If yes, the expenditure is wholly deductible. Click here for details.

Do you incur expenditure on scientific research? If yes, the expenditure is wholly deductible. Click here for details.

Do you incur expenditure on technical education? If yes, the expenditure is wholly deductible. Click here for details.

Do you treat repairs expenditure as cost of improvement in the accounts? If yes, you should claim full deduction of the expenditure in the tax computation. Click here for details.

Do you incur expenditure on refurbishment? If yes, such expenditure should be fully deductible over 5 years of assessment. Click here for details.

Have you claimed depreciation allowances for plant and machinery? Click here for details.

Have you claimed industrial building allowances? Click here for details.

Have you claimed commercial building allowances? Click here for details.

Have you excluded non-taxable receipts from the assessable profits? Click here for what are non-taxable receipts.

Suppose you are an individual taxpayer. Have you applied for personal assessment to reduce your total tax liability? Click here for details.

Suppose your trading receipts have dropped recently. Have you applied for hold-over of provisional tax? Click here for details.

Suppose you run a factory in China. Have you excluded the profits of China factory from assessable profits? Click here for details.

Suppose you have paid China's FEIT. Have you claimed double taxation relief? Click here for details.

Suppose you have incurred losses in back years or from other trades. Have the losses fully set off the assessable profits? Click here for details.

You do not agree to the income assessed or the deduction or relief or allowances granted. In that case, you should read "What can you do if you disagree with an assessment". Click here for details.

Have you read “Common topics of tax reduction”? Click here for details.

Have you read my books and CD Rom on tax reduction? Click here for details.

The checklist is for general guidance only. Indeed the above guidelines are subject to the various conditions laid down in the Inland Revenue Ordinance as well as the judgments made in court and Board of Review cases. Besides, there are exceptions to which the above guidelines do not apply. For details, please refer to the related topics under Site Map. If you are in doubt, you should consult a tax advisor.