Tax Saving Tip #1: Hong Kong “Carryforward”


Who likes paying taxes? Nobody. Fortunately, Hong Kong has one of the lowest corporate tax rates in the world. What’s more, there are several unique ways you can save on your company’s tax bill.

Being wildly profitable in the first few years of business is often far-fetched with getting your name out there and all the startup costs. Even some of the most successful businesses like FedEx, Amazon, and Uber had the same story. To help with that, Hong Kong has laws that use past losses to help you pay less in taxes in the future.  

This idea is called carryforward. Carryforward means if your business lost money in the past, that amount can be used to lower your profits tax in the future. For example, if your business earned a profit of HK$50,000 the second year of operation, but your business lost HK$50,000 in your first year, then your business won’t pay a dollar in taxes. Thanks to carryforward, previous losses can be deducted from future profits. In this scenario, your taxable profit is zero (50k current profit – 50k past losses), and so you’ll pay nothing in taxes.

Many other countries also have carryforward policies, but what makes Hong Kong’s policy unique is no restrictions on the time or amount. Meaning, no matter how many years it is before you turn profitable nor the dollar figure of the losses accumulated is restricted to carryforward in Hong Kong. The same can’t be said for countries like the Netherlands, Spain, the US, France and many many more. So, when your business does become wildly profitable in Hong Kong, enjoy some extra cash!

Centre O would be happy to act as your tax representative and make you benefit from this rule! Contact us at for more details.

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