Hong Kong Musician & Performer Tax — Expert Advisory

Music streaming royalties received by HK-resident musicians are generally assessable as profits from a business or profession. The sourcing question — HK vs offshore — is complex for streaming royalties: if the music is primarily streamed by overseas listeners through overseas platform operations, there may be an offshore element. However, royalties collected by a HK PRO (performing rights organisation) from HK-based streaming use are HK-source. A detailed analysis of your royalty collection chain is needed.

Non-resident performers performing in Hong Kong are subject to HK salaries tax or profits tax on their HK performance income under s.20A IRO. The promoter or production company paying the non-resident must withhold tax at the standard rate before payment. The non-resident must submit an income statement to the IRD. Under DIPN 23, assessable income is the gross performance fee minus allowable expenses. Failure to withhold makes the payer (promoter) liable for the tax.

Yes. Professional instruments used in the course of generating performance or royalty income qualify as plant & machinery for capital allowance purposes. High-value instruments (a concert piano, a professional violin, studio equipment) attract the 60% initial allowance plus 30-20% annual allowance. Practice instruments used exclusively for professional music can also qualify. Personal hobby instruments with no professional use are not deductible.

All income is assessable regardless of the form in which it is received. Cash fees are valued at face value. Crypto received as payment is valued at the market value at the date of receipt. NFT royalties in crypto are similarly valued at receipt date market value. Any subsequent gain or loss on holding the crypto/NFT is a separate question — if held for investment, potentially not taxable (no CGT); if traded as a business, taxable on the gain. Maintaining records of all receipt values is essential.

Yes — where a musician has a dedicated home recording studio used exclusively for professional music production, the costs are deductible: dedicated room rental value (proportion of home rent), recording equipment (capital allowances), acoustic treatment, software (Logic, Pro Tools, Ableton), instrument cables and accessories, and recording consumables. The studio must be used exclusively for professional music work — if it doubles as a general room, only the exclusive use proportion is deductible.