📋 Key Highlights
- Tax Residency Definition: Staying in Hong Kong for more than 180 days in a single year of assessment, or more than 300 days across two consecutive years
- Salaries Tax Rates (2024/25): Progressive rates from 2% to 17%, or standard rate of 15% (first HK$5 million) / 16% (thereafter)
- Basic Allowance: HK$132,000
- eTAX Deadline Extension: Automatic 1-month extension to July 2
- Mandatory Electronic Filing: Effective April 1, 2024, employers must submit Form IR56B online
- Record Retention Period: All tax-related documents must be kept for at least 7 years
- 60-Day Exemption Rule: Stays in Hong Kong not exceeding 60 days with services rendered outside Hong Kong may qualify for exemption
Note: The current year of assessment is 2026/27 (April 1, 2026 to March 31, 2027). The tax rates and allowances below reflect the latest published 2024/25 figures—which generally remain applicable unless adjusted in the latest Budget, but please verify the latest amounts on the Inland Revenue Department website before filing.
As a non-resident director of a Hong Kong company, are you confused about how to handle tax compliance from overseas? With the continuous enhancement of the Inland Revenue Department's "eTAX" electronic services platform, managing your tax obligations has never been more convenient. This comprehensive 2024-2025 guide will walk you through how to fulfill your Hong Kong tax responsibilities as a non-resident director and capitalize on the benefits of digital tax management.
Understanding Non-Resident Director Status in Hong Kong
What Is a Non-Resident Director?
In Hong Kong, tax residency status is not determined solely by your place of residence, but by a series of specific tests evaluating your ties to Hong Kong. The Inland Revenue Department (IRD) applies clear criteria to determine whether you qualify as a tax resident.
You will generally be regarded as a Hong Kong tax resident if you meet any one of the following conditions:
- Ordinary Residence Test: Your habitual residence is in Hong Kong
- 180-Day Rule: You stay in Hong Kong for more than 180 days during a year of assessment (April 1 to March 31)
- 300-Day Rule: You stay in Hong Kong for more than 300 days across two consecutive years of assessment (including the relevant year)
If you do not satisfy any of the above tests, you will be treated as a non-resident. However, this does not mean you are automatically exempt from paying Hong Kong tax on Hong Kong-sourced income, particularly director's fees.
Territorial Source Principle of Taxation
Hong Kong operates on a territorial basis of taxation, which means that all individuals—whether residents or non-residents—are subject to Hong Kong Salaries Tax on income arising in or derived from Hong Kong from:
- Any employment sourced in Hong Kong
- Any office (including directorships) held in Hong Kong
- Any pension derived from Hong Kong
The 60-Day Exemption Rule
There is a limited exemption: if you visit Hong Kong for not more than 60 days during a year of assessment and all services are rendered outside Hong Kong, you may qualify for an exemption. However, this rule rarely applies to directors because holding a directorship in a Hong Kong company is regarded as holding an office in Hong Kong, and the associated income is taxable regardless of where the duties are performed.
"eTAX" Platform: Your Digital Compliance Gateway
Overview of eTAX Services for Non-Residents
The Inland Revenue Department's "eTAX" platform has undergone significant upgrades, making it exceptionally user-friendly for non-resident taxpayers. The system provides the following services:
- 24/7 Global Access: File tax returns from anywhere in the world
- Automatic Extension: Electronic filing automatically grants a one-month extension (individual tax returns are extended to July 2 instead of June 2)
- Real-Time Tax Computation: The system automatically calculates your tax liability
- Secure Transmission: Encrypted communication protects sensitive data
- Instant Confirmation: Receive immediate confirmation upon submitting tax returns
- Document Upload: Electronically submit supporting documents (in PDF/JPG format)
- Payment Integration: Pay taxes online through multiple payment methods
- Status Tracking: Monitor the processing status of tax returns and correspondence
Logging into the Individual Tax Account
Non-resident directors primarily use the "Individual Tax Account" at https://itp.etax.ird.gov.hk to file their Tax Return - Individuals (Form BIR60). Accessing the platform requires:
- Your Tax Identification Number (TIN)
- Your Hong Kong Identity Card (HKIC) number or Passport number
- A valid email address for receiving notifications
- Your dedicated login credentials (obtained through initial registration)
Tax Obligations of Non-Resident Directors
Individual Tax Return (BIR60)
Form BIR60 is issued to individual taxpayers for reporting salaries, rental income from sole-owned properties, and profits from sole proprietorship businesses. For non-resident directors, the primary focus is reporting director's fees.
| Item | Details |
|---|---|
| Year of Assessment | April 1 to March 31 (e.g., 2024/25 covers April 1, 2024 to March 31, 2025) |
| Issue Date | Around May 2 annually |
| Paper Submission Deadline | June 2 (one month from the issue date) |
| Electronic Submission Deadline | July 2 (automatically extended by one month) |
Employer Reporting Requirements (IR56B)
While directors are required to file an individual tax return (BIR60), Hong Kong companies engaging non-resident directors must fulfill employer reporting obligations through the employer's return (Form BIR56A and the IR56 series forms).
Key updates affecting non-resident directors:
- Mandatory Electronic Filing: All IR56B forms must be submitted via online electronic tax filing.
- Increased Capacity: The file capacity of the IR56 e-filing tool has been expanded from 800 records to 2,000 records per file, with a maximum limit of 5,000 records per submission.
This means Hong Kong companies must report all remuneration for non-resident directors—including fees, salaries, bonuses, benefits in kind, and other compensation—regardless of where the payment is made or received.
Understanding Hong Kong Tax Rates for 2024/25
Salaries Tax Calculation Methods
Hong Kong offers two methods for calculating Salaries Tax, and the Inland Revenue Department will automatically apply the method that results in a lower tax amount:
Method 1: Progressive Rates
| Net Chargeable Income | Tax Rate | Tax for the Band |
|---|---|---|
| First HK$50,000 | 2% | HK$1,000 |
| Next HK$50,000 | 6% | HK$3,000 |
| Next HK$50,000 | 10% | HK$5,000 |
| Next HK$50,000 | 14% | HK$7,000 |
| Remainder | 17% | 17% of the amount in excess of HK$200,000 |
Method 2: Standard Rate
Under the two-tiered standard rates regime for 2024/25:
- First HK$5,000,000 of Net Chargeable Income: 15%
Net Chargeable Income is calculated as total income minus allowable deductions and personal allowances. Net Assessable Income is total income minus deductions only (before deducting personal allowances).
Allowances and Deductions That Can Be Claimed
Non-resident directors may claim certain allowances and deductions to reduce their tax liabilities:
| Type of Allowance / Deduction | Amount (2024/25) |
|---|---|
| Basic Allowance (Single) | HK$132,000 |
| Married Person's Allowance | HK$264,000 |
| Child Allowance (Per child) | HK$130,000 |
| Child Allowance (Year of birth) | Additional HK$130,000 |
| Dependent Parent Allowance (Aged 60 or above) | HK$50,000 per parent |
| Mandatory MPF Contributions | Actual contribution amount (Capped at HK$18,000 per year) |
| Self-Education Expenses | Up to HK$100,000 (Deduction) |
Profits Tax Rates (Applicable to Director-Shareholders)
Directors who also receive profit distributions from their Hong Kong companies should take note of the two-tiered profits tax rates regime:
| Entity Type | First HK$2,000,000 | In excess of HK$2,000,000 |
|---|---|---|
| Corporations | 8.25% | 16.5% |
| Unincorporated Businesses | 7.5% | 15% |
It is worth noting that Hong Kong does not levy capital gains tax, dividend tax, or withholding tax on interest income, making it an attractive jurisdiction for doing business.
Step-by-Step eTAX Filing Guide for Non-Resident Directors
Preparing Your eTAX Submission
Before logging in to the eTAX platform, please prepare the following necessary documents:
- Identity Documents: Hong Kong Identity Card (HKID) or passport details
- Income Records: Details of all director's fees, salaries, bonuses, and benefits received
- Form IR56B: Copy of Form IR56B issued by your Hong Kong employer company
- Proof of Deductions: MPF contribution statements, self-education expense receipts, approved charitable donation receipts
- Dependent Details: Information of spouse, children, and dependent parents if claiming allowances
- Bank Account Details: For tax refund or tax payment arrangements
- Prior Year Tax Returns: Tax returns from previous years for reference
Submission Process via Personal Tax Account
- Step 1: Log in to Account
Visit https://itp.etax.ird.gov.hk, enter your login credentials, and complete authentication if two-factor authentication is enabled. - Step 2: Select the Appropriate Tax Return
Select Form BIR60 for the relevant year of assessment (e.g., 2024/25) and confirm that your personal particulars are accurate. - Step 3: Report Income
Enter employment income details in Part 4 of the tax return, report director's fees and salaries separately if applicable, and include all benefits-in-kind. - Step 4: Claim Allowances and Deductions
Select applicable personal allowances, enter deductible expenses, and upload supporting documents in PDF or JPG format. - Step 5: Review Automatic Tax Computation
The system will automatically calculate your tax payable—review the computation results under both progressive tax rates and standard tax rate.
Review all information to ensure accuracy, submit the tax return electronically, and retain the submission confirmation receipt with the reference number.
Wait for the Notice of Assessment issued by the Inland Revenue Department (usually 3–6 months after submission) and pay the tax by the indicated due dates, typically in two installments.
Double Taxation Relief and Tax Planning
Understanding Comprehensive Double Taxation Agreements
As a non-resident director, you may be subject to tax on the same income in both your country of residence and Hong Kong. Hong Kong has entered into Comprehensive Double Taxation Agreements (CDTAs) with over 45 tax jurisdictions, offering relief through the following methods:
- Tax Credit: Offset tax paid in Hong Kong against tax payable in your country of residence
- Exemption Method: Exempt certain income from tax in a specific tax jurisdiction
- Reduced Tax Rates: Lower withholding tax rates on certain categories of income
- Tie-Breaker Rules: Clarify tax residency status when you qualify as a resident in both tax jurisdictions
To claim treaty benefits, you generally need to obtain a "Certificate of Resident Status" from the tax authority of your country of residence and submit it to the Inland Revenue Department along with the relevant claim form.
Tax Planning Strategies for Non-Resident Directors
Legitimate tax planning can reduce your overall tax burden while maintaining compliance:
- Effectively Structure Remuneration: Consider a combination of director's fees, salary, and dividends based on tax implications in both jurisdictions
- Timing of Income: Strategically time income payments to optimize allowances and deductions across different tax years
- Utilize Deductions: Ensure all eligible deductions are claimed, including MPF contributions and allowable expenses
- Leverage CDTAs: Understand and utilize available treaty benefits to avoid double taxation
- Properly Maintain All Documentation: Keep comprehensive records to support your tax positions and treaty claims
- Conduct Regular Compliance Reviews: Regularly review your tax structure with professionals
Compliance Requirements and Record Keeping
Mandatory Record Keeping
The Inland Revenue Department requires taxpayers to properly retain records for at least 7 years. Non-resident directors must keep:
- All tax returns and schedules
- Notices of Assessment and Demand for Tax
- Tax payment receipts and bank statements showing tax payments
- Employment contracts and director service agreements
- All records of remuneration received (payslips, bank credit records, fee invoices)
- Forms IR56B received from employers
- Proof of deductible expenses (MPF statements, receipts)
✅ Key Summary
- Director's fees received by non-resident directors for holding an office as a director of a Hong Kong company are generally subject to Hong Kong Salaries Tax, regardless of where the services are rendered or where the payment is received.
- Leveraging the "eTAX" platform grants an automatic one-month extension for tax filing (until July 2) and allows tax affairs to be managed anytime, anywhere.
- Starting from April 1, 2024, employers must submit Form IR56B online to report the remuneration of all non-resident directors.
- Understanding and claiming eligible personal allowances and deductions can effectively reduce the tax payable.
- Hong Kong has signed Comprehensive Double Taxation Agreements with over 45 jurisdictions; non-resident directors should understand the relevant relief arrangements.
- All tax-related