Hong Kong Dividend Tax 2027: Capital Gains, Sales Tax & Stamp Duty
Kenji Farre, Director · Oct 31, 2026 · 7 min read
Hong Kong does not tax dividends, capital gains or interest on bank deposits for individual investors, and there is no sales tax, VAT or GST. You pay salaries tax on employment income (progressive rates from 2% to 17%, capped at a standard rate of 15% on the first HK$5 million of net income) and property tax of 15% on rental income after a 20% repairs allowance. The main investment cost is stamp duty of 0.1% on each side of a Hong Kong stock trade, in force since 17 November 2023. Estate duty was abolished for deaths on or after 11 February 2006. The catch: if you trade so often that the Inland Revenue Department (IRD) sees it as a business, profits tax applies, and your home country may still tax you.
This guide is for expats working in Hong Kong who invest: what you do and don't pay tax on, the trading test, crypto, stamp duty, and how US and UK rules can follow you here.
What Do You Actually Pay Tax On in Hong Kong?
Hong Kong taxes three things for most individuals: your salary, rental income from Hong Kong property, and profits from a business carried on in Hong Kong. Almost everything else an investor earns is outside the net. The IRD says profits tax only applies to profits arising in or derived from Hong Kong, and that profits from the sale of capital assets are excluded.
Low tax is one of the main reasons professionals move here. If you're looking for an English-speaking role, check out ExpatJobBoard.com. We list thousands of jobs in Hong Kong that don't require Cantonese or Mandarin.
| Income or transaction | Taxed in Hong Kong? | Rate or rule (2026/27) |
|---|---|---|
| Salary, bonus, housing benefit | Yes, salaries tax | 2% to 17% progressive, or 15% standard rate on first HK$5m of net income (16% above) if lower |
| Capital gains on shares, funds, property held as investments | No | Taxable under profits tax only if you are trading as a business |
| Dividends from shares | No | Dividends from a company that pays Hong Kong profits tax are excluded; no withholding tax |
| Interest on Hong Kong bank deposits | No | Exempt when deposited with an authorised institution |
| Crypto gains (long-term investment) | No | Taxable only if you trade crypto as a business |
| Crypto received as salary | Yes | Taxed as salary at market value |
| Rental income from Hong Kong property | Yes, property tax | 15% of net assessable value (rent less rates, then less 20%) |
| Business or freelance profits | Yes, profits tax | 7.5% on first HK$2m, 15% above (unincorporated) |
| Sales tax, VAT or GST | None | No consumption tax at all |
| Spirits over 30% alcohol, tobacco, fuel, methyl alcohol | Yes, excise duty | See duty table below |
| Stock purchases and sales | Yes, stamp duty | 0.1% for buyer and 0.1% for seller |
| Property purchases | Yes, stamp duty | HK$100 up to HK$4m, then 1.5% to 6.5% |
| Inheritance and estate duty | None | Abolished for deaths on or after 11 February 2006 |
| Withholding tax on dividends and interest | None | Royalties paid to non-residents are the main exception |
Source: Inland Revenue Department, Customs and Excise Department, PwC Worldwide Tax Summaries
For the detail on payroll deductions and allowances, see our full guide to Hong Kong salaries tax.
Is There Capital Gains Tax in Hong Kong?
No. There is no capital gains tax in Hong Kong for shares, funds, bonds, property or crypto held as investments. The IRD states in its guide to taxes that profits from the sale of capital assets are excluded from the profits tax charge.
The exception is trading. If buying and selling is your business, the gains are trading profits and fall under profits tax. The IRD gives the example of selling a flat as part of a profit-making scheme, which it treats as a business even if you only did it once.
When Does Trading Become a Taxable Business?
There is no fixed number of trades. The question is whether you bought the asset as an investment or as trading stock, and the IRD judges your intention at purchase from the facts, not what you say afterwards.
Hong Kong courts and the Board of Review use the "badges of trade". EY's Hong Kong tax controversy briefing lists them as:
- Subject matter: assets that give no income or personal use point to trading; dividend-paying shares point to investment.
- Motive: buying purely to sell quickly at a profit.
- Length of ownership: short holding periods suggest trading.
- Frequency: repeated, similar transactions.
- Supplementary work: improving or marketing the asset to sell it.
- Circumstances of the sale: a forced sale (job loss, emergency) points away from trading.
- Financing: added by the Court of Final Appeal in Lee Yee Sing, for example short-term borrowing that only works if you sell quickly.
In practice, an employee who buys index funds or holds blue chips for years is investing. Someone day-trading on margin or flipping off-plan flats is at real risk of a profits tax assessment. If you're close to the line, keep records of why you bought each holding.
If the IRD treats you as trading, you file as an unincorporated business. Our guide to profits tax for freelancers explains registration and filing.
Does Hong Kong Tax Dividends?
No. Hong Kong has no dividend tax for individuals and no withholding tax on dividends paid out of Hong Kong companies. PwC's Worldwide Tax Summaries confirms there is no withholding tax on dividends or interest.
Foreign shares can still suffer withholding tax in the country where the company is based, before the dividend reaches your Hong Kong broker, and Hong Kong gives you no credit for it because there is no Hong Kong tax to offset. Separately, the dividend may be taxable in your home country if you are still tax resident or a citizen there.
Is Bank Interest Taxed in Hong Kong?
No, not for individuals. The IRD exempts interest on deposits with an authorised institution in Hong Kong, and salaries tax doesn't cover investment income.
The IRD also exempts interest on certain government bonds, Exchange Fund paper and qualifying debt instruments.
How Is Crypto Taxed in Hong Kong?
Crypto follows the same capital versus trading logic as shares. The IRD's practice note DIPN 39 (revised in 2020) covers digital assets. According to KPMG's summary, profits from selling digital assets bought for long-term investment are capital in nature and not chargeable to profits tax, and the test is your intention when you acquired them.
Crypto trading, exchange or mining as a business is different. The HKICPA's summary of DIPN 39 says this is a question of fact and degree, judged with the badges of trade, and Hong Kong sourced profits are taxable. Crypto paid to you by an employer is taxed like salary at its market value.
Does Hong Kong Have Sales Tax, VAT or GST?
No. There is no sales tax, VAT or GST in Hong Kong. The price on the tag is the price you pay.
The only consumption taxes are excise duties on four groups of goods. According to the Customs and Excise Department, these are liquor, tobacco, certain hydrocarbon oils and methyl alcohol. Wine carries no duty.
| Dutiable commodity | Duty rate |
|---|---|
| Liquor over 30% alcohol (bottles up to 1 litre) | 100% on the first HK$200 of value, 10% on the remainder |
| Wine, and liquor at 30% alcohol or below | 0% |
| Cigarettes | HK$3,306 per 1,000 sticks |
| Unleaded petrol | HK$6.06 per litre |
| Ultra low sulphur diesel | HK$2.89 per litre |
| Methyl alcohol | HK$840 per hectolitre, plus HK$28.10 per hectolitre for each 1% above 30% strength |
Source: Customs and Excise Department, Types and Duty Rates of Dutiable Commodities
So a HK$500 bottle of whisky carries HK$230 of duty (HK$200 plus 10% of HK$300). The full schedule is on the Customs and Excise Department's types and duty rates page.
What Is the Stamp Duty on Shares in Hong Kong?
Stamp duty on Hong Kong stock is 0.1% of the value of the trade, charged to both the buyer and the seller. The IRD confirmed the cut from 0.13% took effect on 17 November 2023. Your broker collects it automatically on each contract note.
Buy HK$500,000 of Hong Kong listed shares and you pay about HK$500 in stamp duty. Sell them later and you pay about another HK$500 on the sale value. The duty is on Hong Kong stock, so trades in overseas listed shares fall under the rules of the market where they're listed instead.
How Much Is Stamp Duty on Property in Hong Kong?
Ad valorem stamp duty on property is HK$100 for anything up to HK$4 million, then rises in bands. The IRD's latest rates took effect on 26 February 2026 and include a 6.5% top rate for homes over about HK$110 million.
| Property price (residential) | Ad valorem stamp duty |
|---|---|
| Up to HK$4,000,000 | HK$100 |
| HK$4,323,781 to HK$4,500,000 | 1.5% |
| HK$4,935,481 to HK$6,000,000 | 2.25% |
| HK$6,642,861 to HK$9,000,000 | 3% |
| HK$10,080,001 to HK$20,000,000 | 3.75% |
| HK$21,739,121 to HK$100,000,000 | 4.25% |
| HK$109,574,471 and above | 6.5% |
Source: Inland Revenue Department, Ad Valorem Stamp Duty FAQ (rates effective 26 February 2026)
The gaps between bands are marginal relief zones where a fixed sum plus a percentage of the excess applies. You can check the exact amount for your price on the IRD's ad valorem stamp duty page. The IRD's 2024/25 guide confirms Buyer's Stamp Duty on residential property has been 0% since 28 February 2024, so non-permanent residents now pay the same rates as locals.
How Is Property Tax Calculated in Hong Kong?
Landlords pay property tax at 15% of the net assessable value. According to the IRD's notes for the 2025/26 return, you take the rent, deduct irrecoverable rent and any rates you paid as owner, then deduct a flat 20% statutory allowance for repairs and outgoings. That works out at an effective 12% of rent after rates.
You don't get to deduct your actual repair bills under property tax: the 20% allowance is automatic and replaces them. If you have a mortgage on the let property, ask the IRD or an adviser whether electing personal assessment would lower your bill.
A flat you live in yourself triggers no property tax.
Worked Example: What an Expat Investor Pays
Take a single expat earning HK$1.2 million in 2026/27 with a portfolio and one rental flat.
| Item | Amount | Hong Kong tax |
|---|---|---|
| Salary | HK$1,200,000 | HK$158,290 salaries tax (see below) |
| MPF mandatory deduction | HK$18,000 | Reduces taxable income |
| Dividends from HSBC, Tencent and US ETFs | HK$40,000 | HK$0 (US withholding may apply on US ETFs) |
| Bank deposit interest | HK$15,000 | HK$0 |
| Gain on selling long-held shares | HK$200,000 | HK$0 |
| Bitcoin held for three years, sold at a gain | HK$80,000 | HK$0 |
| Stamp duty on HK$500,000 of HK shares bought | HK$500,000 | About HK$500 |
| Rental income (owner pays HK$10,000 rates) | HK$240,000 | HK$27,600 property tax |
Source: ExpatJobBoard calculation using IRD 2026/27 rates and allowances
Net chargeable income is HK$1,200,000 less the HK$18,000 MPF deduction and the HK$145,000 basic allowance, which leaves HK$1,037,000. The first HK$200,000 at the 2%, 6%, 10% and 14% bands costs HK$16,000, and the remaining HK$837,000 at 17% costs HK$142,290, for HK$158,290. The standard rate alternative is 15% of HK$1,182,000, which is HK$177,300, so the progressive figure applies.
Property tax is HK$230,000 times 80% times 15%, which is HK$27,600. The HK$335,000 of investment income and gains costs nothing.
Can You Reduce Salaries Tax With MPF Voluntary Contributions?
Yes, through Tax Deductible Voluntary Contributions (TVC). The IRD allows a combined deduction of up to HK$60,000 a year for TVC and qualifying deferred annuity policy premiums. Ordinary voluntary contributions above the mandatory 5% are not deductible, according to the IRD's MPF FAQ.
The mandatory MPF deduction is capped at HK$18,000 for 2025/26 across all your schemes. In the worked example above, HK$60,000 of TVC would save HK$10,200 at the 17% marginal rate. The catch: TVC money is locked in until 65. Our MPF guide covers withdrawal rules for permanent departure.
Will Your Home Country Still Tax You?
Often, yes.
- US citizens and green card holders: the IRS says the worldwide income of US citizens and resident aliens is subject to US income tax wherever they live. Deloitte's 2026 guide puts the foreign earned income exclusion at US$132,900 for 2026, but that covers earned income only, so your dividends, interest and capital gains stay taxable in the US. You must also file an FBAR if your foreign accounts total more than US$10,000 at any point in the year.
- UK nationals: the UK taxes by residence, not citizenship. HMRC's manual confirms the remittance basis was abolished from 6 April 2025, so anyone who remains UK resident is taxed on worldwide income and gains as they arise. If you've genuinely become non-resident, check the statutory residence test carefully in the year you leave and the year you return.
- Everyone else: most countries tax by residence, and some keep treating you as resident if you keep a home or family there. Get advice before you move, not after.
If your home tax authority or a foreign bank asks you to prove you're tax resident here, you'll need a Hong Kong tax residency certificate. Banks and brokers will also ask for your Hong Kong tax identification number when you open accounts.
When you eventually go, Hong Kong has no exit tax on your portfolio, but you'll still need to settle your final salaries tax before you leave. Our leaving Hong Kong checklist covers the timing.
Are There Withholding Taxes in Hong Kong?
Only in narrow cases. There is no withholding tax on dividends, interest or salaries. The main exception is royalties paid to non-residents for using intellectual property in Hong Kong, which the payer must deduct tax from: PwC's Worldwide Tax Summaries puts the effective rate at 2.475% to 4.95% of the gross royalty for most non-treaty recipients.
FAQs: Hong Kong Dividend and Capital Gains Tax
Does Hong Kong tax dividends for expats?
No. Individuals pay no Hong Kong tax on dividends, whether from Hong Kong or overseas companies, and Hong Kong companies don't withhold tax when they pay them. Foreign withholding tax can still apply on overseas shares, and your home country may tax the dividend.
Is there capital gains tax in Hong Kong?
No. Gains on shares, funds, property and crypto held as investments are not taxed. Profits are only taxable if the IRD decides you're trading as a business, in which case profits tax applies.
Does Hong Kong have sales tax?
No. Hong Kong has no sales tax, VAT or GST. The only consumption taxes are excise duties on spirits over 30% alcohol, tobacco, certain fuels and methyl alcohol.
How much is stamp duty on Hong Kong shares?
It is 0.1% of the trade value for the buyer and 0.1% for the seller, effective since 17 November 2023. Your broker deducts it automatically. It only applies to Hong Kong stock, not overseas shares.
Is crypto taxed in Hong Kong?
Long-term crypto investment gains are not taxed. Under DIPN 39 the IRD looks at your intention when you bought, and frequent trading, mining or running an exchange can be taxed as a business. Crypto received as salary is taxed as employment income.
Is there inheritance tax in Hong Kong?
No. Estate duty was abolished for deaths on or after 11 February 2006, so there's no inheritance tax on Hong Kong assets. Your home country may still levy inheritance or estate tax on worldwide assets.
How many trades make me a trader in the eyes of the IRD?
There's no fixed number. The IRD weighs the badges of trade: your motive, how long you hold, how often you trade, how you finance purchases and why you sold. Daily margin trading is far riskier than buying and holding funds.
Do US citizens in Hong Kong pay tax on dividends?
Yes, to the IRS. US citizens are taxed on worldwide income, and the foreign earned income exclusion only covers earned income, not dividends or gains. A US expat tax adviser is worth paying for.
Key Takeaways
- Hong Kong does not tax dividends, capital gains on investments or bank deposit interest for individuals, and there is no withholding tax on dividends or interest.
- Salaries tax runs from 2% to 17%, capped at a 15% standard rate on the first HK$5 million of net income, with a HK$145,000 basic allowance from 2026/27.
- Rental income pays property tax at 15% of rent after rates and a 20% repairs allowance, an effective 12%.
- Stamp duty is 0.1% per side on Hong Kong stock trades and HK$100 on property up to HK$4 million, rising to 6.5% at the very top.
- There is no sales tax or VAT; excise duty applies only to spirits over 30% alcohol, tobacco, certain fuels and methyl alcohol.
- Frequent or leveraged trading in shares, property or crypto can be taxed as a business under the badges of trade.
- US citizens remain taxable on worldwide income, and UK residents lost the remittance basis from 6 April 2025, so check your home country rules.
Find a Job in Low-Tax Hong Kong
Keeping more of your salary and paying nothing on your investment gains is a big reason people relocate here. Browse English-speaking roles on ExpatJobBoard.com and start planning your move.
