Q275 · What are the main tax obligations for…

Q275 · Category F: Fees, budgeting and financial planning (Q251–Q300)

The principal tax obligation for operating a pharmaceutical business in Hong Kong is profits tax. Under Hong Kong’s two-tiered profits tax rates, the first HKD 2,000,000 of assessable profits of a limited company is taxed at 8.25%, while profits exceeding HKD 2,000,000 are taxed at the standard rate of 16.5%. You must submit financial statements audited by a practising accountant and a profits tax return to the Inland Revenue Department within the prescribed period after the end of each year of assessment. In addition, as an employer, you must report employees’ remuneration and withhold tax from payments to certain non-resident service providers.

📘 Regulatory basis

Taxation in Hong Kong is governed mainly by the Inland Revenue Ordinance (Cap. 112), which provides for the assessment and collection of profits tax, salaries tax and property tax. Filing tax returns accurately and on time in accordance with the law is a basic legal obligation for every company in Hong Kong.

📗 Drew Tang's recommendations

We recommend that you engage a professional accountancy firm to handle all tax matters. As well as ensuring that you file accurately and on time, it can plan your tax affairs based on your specific business circumstances, making lawful use of deductions and allowances permitted under tax legislation to optimise your tax burden.

📕 Risk notice

Tax evasion or filing false tax returns is a serious criminal offence in Hong Kong. The Inland Revenue Department has extensive investigative powers. If a business is found to have concealed profits or falsely claimed expenses, it may not only be required to pay the tax due and substantial penalties (which may be up to three times the amount of tax underpaid), but its directors may also face imprisonment. Do not take any chances with tax matters.

Plan Your Hong Kong Pharmaceutical Licensing Project with Drew Tang

Business Manager Tang Shangyong (Drew Tang) will review your products, operating model, licence type and preparation requirements with you one-to-one. The precise service scope is confirmed in writing; pharmaceutical duties are carried out by legally qualified personnel, and approvals are determined by the competent authorities.

What are the main tax obligations for operating a pharmaceutical business in Hong Kong? What is the profits tax rate?

Plan Your Hong Kong Pharmaceutical Licensing Project with Drew Tang