No sales tax, no VAT
The government's investment agency lists no sales tax or VAT, no withholding tax and no capital gains tax among the taxes Hong Kong does not charge, and says only three direct taxes are imposed[1]. An invoice to a Hong Kong customer therefore shows the price and the total, with no tax line added. If your customer is overseas, their own country's rules on importing services or goods are theirs to check.
Where tax does come in
Your business pays profits tax on its assessable profits for the year, worked out from the income your invoices record.
| Business | First $2,000,000 of assessable profits | Remainder |
|---|---|---|
| Corporation | 8.25% | 16.5% |
| Unincorporated business (sole proprietor or partnership) | 7.5% | 15% |
| 2025/26 reduction | 100% of the profits tax waived, capped at $3,000 per case | |
What an invoice should contain
The IRD's guide to keeping business records says to use sequentially numbered invoices for goods or services you supply, and lists the minimum information each should contain[3]:
- invoice number;
- date of issue;
- customer's name and address;
- your business's name and address;
- date of transaction;
- description of goods or services, including quantities and prices;
- total price.
Payment terms, bank details and a due date are not on the list, but adding them makes the invoice easier to pay and to chase.
The company name rule
A company must state its registered name in legible characters in every transaction instrument it issues[4], and the Companies Registry confirms that this includes any invoice or receipt, on paper or electronic[5]. Issuing an invoice without it is an offence with a fine of up to $10,000 (level 3)[4][8].
Keeping the invoices
Every business must keep sufficient records of its income and expenditure, including invoices and receipts, so that its assessable profits can be readily ascertained, and keep them for not less than 7 years[6]. The fine for failing to do so without reasonable excuse is up to $100,000[6]. Keep a copy of every invoice you issue, including any you cancel, so the number sequence has no unexplained gaps.
The records must be in English or Chinese[6], so an invoice issued in another language needs a translation kept with it. A business providing services must also keep records of the services provided in sufficient detail for the IRD to verify the entries[6]; the invoice description is usually where that detail starts.
When the invoice counts as income
The date on the invoice is not always the date the income counts. The IRD recognises revenue when goods are sold or services are provided, and normally does not accept the cash basis[7]. An invoice raised in advance for work not yet done is income of the year the work is done, and an invoice for work finished in March belongs to that year even if it is paid in May. Matching each invoice to the period of the work it bills keeps the profits tax figure right.
Invoices you receive
For the bills your suppliers send you, the IRD lists the details a receipt should show: date, name of supplier or service provider, amount paid, and a description of what was paid for[3]. Ask suppliers for a proper document when one is missing, because your expenses are only as good as the paper behind them.
Rules, forms and figures can change, and the official pages listed below are the authority wherever this summary differs from them.