Hong Kong

Hong Kong has one of the simplest and lowest personal tax systems in the world. Salaries tax uses progressive rates of 2%, 6%, 10%, 14%, and 17% on net chargeable income, with a standard rate of 15% available as an alternative cap. Only the lower of the two applies. A basic personal allowance of HKD 132,000 significantly reduces the tax base. Mandatory Provident Fund (MPF) contributions are 5% for both employer and employee, capped at HKD 1,500 per month (on maximum relevant income of HKD 30,000). The MPF system has been criticized for high fees and modest returns. Hong Kong has no capital gains tax, no dividend tax, no VAT/GST, no inheritance tax, and territorial taxation (only Hong Kong-sourced income is taxed). This makes it one of the world's most tax-friendly jurisdictions for individuals. Tax deductions include self-education expenses, home loan interest (up to HKD 100,000), mandatory pension contributions, charitable donations, and various personal and dependent allowances. Profits tax (corporate) is 8.25% on the first HKD 2 million and 16.5% thereafter.