⚠ US Citizens in HK Must File US Tax Returns Every Year
The US taxes its citizens on worldwide income regardless of residency. A US citizen living in HK who earns only HK-source income still must file a Form 1040 with the IRS annually. Failure to file carries penalties of USD 10,000+ per year — even if no US tax is owed.
Common Challenges
Worldwide Income Taxation
US citizens and green card holders must report and pay US tax on all worldwide income — HK salary, HK company profits, rental income, and investment gains.
⚠ Risk: Unfiled returns → automatic USD 10,000 penalty per year + interest + potential criminal charges
FBAR & FATCA Reporting
US persons with HK bank accounts exceeding USD 10,000 must file FBAR (FinCEN 114) annually. FATCA (Form 8938) applies to broader foreign financial assets above USD 50,000.
⚠ Risk: Unfiled FBAR → USD 10,000–100,000 penalty per account per year
GILTI on HK Company Ownership
US shareholders owning ≥10% of a HK company (Controlled Foreign Corporation) may owe US GILTI tax on the company's profits annually — even without a dividend.
⚠ Risk: Unknown GILTI liability → years of unfiled Form 5471 + penalties USD 10,000/year
No HK–US Tax Treaty
Unlike most major jurisdictions, there is NO double tax treaty between HK and the US. Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit are the main relief mechanisms.
⚠ Risk: No treaty → limited protection against double taxation on HK income
Who Is This For?
US citizens living in Hong Kong
Americans resident in HK who need annual US tax return filing alongside HK salaries tax.
US green card holders in HK
Permanent residents of the US living and working in HK with worldwide US tax obligations.
US shareholders of HK companies
US persons owning HK companies who may have GILTI and Subpart F obligations.
HK financial institutions under FATCA
HK banks, funds, and financial intermediaries with FATCA reporting and withholding obligations.
What We Do
US Expat Tax Return Filing
Prepare and file US Form 1040 for HK-resident US persons, including FEIE election, Foreign Tax Credit, and HK income analysis.
Including state returns where applicable
FBAR & FATCA Compliance
Prepare and file FinCEN 114 (FBAR) and Form 8938 (FATCA) for HK bank accounts, investment accounts, and foreign financial assets.
Annual compliance + catch-up filings
GILTI & CFC Analysis
Analyse US GILTI and Subpart F obligations for US shareholders of HK companies and advise on structuring to minimise US tax on HK company profits.
Form 5471 preparation
IRS Streamlined Procedure
For US persons who are behind on filings, manage the IRS Streamlined Foreign Offshore Procedure — the amnesty programme for non-wilful non-filers.
Reduced or zero penalties for qualifying taxpayers
How It Works
US Tax Position Review
1-2 daysAssess current US filing compliance status and identify gaps.
Prior Year Catch-Up
4-8 weeksPrepare any missing prior year returns via Streamlined Procedure.
Current Year Filing
2-4 weeksPrepare and file current year 1040, FBAR, and any required international forms.
Annual Compliance
AnnualOngoing annual US return preparation with HK tax coordination.
Case Studies
US banker in HK — 5 years of unfiled returns
- •5 years of US returns filed via Streamlined Procedure
- •6 years of FBAR filed
- •Zero penalty under Streamlined offshore programme
- •FEIE optimised: USD 85K excluded per year
- •HK FTC offset remaining US tax to near zero
“I had no idea I was non-compliant. They sorted 5 years in 8 weeks with no penalties.”
US entrepreneur — HK company GILTI planning
- •100% US-owned HK company generating HKD 8M profits
- •GILTI liability identified: USD 142K annual US tax
- •Corporate structure introduced: 962 election considered
- •HK profits tax credit offset GILTI by 80%
“We didn't know GILTI existed until they flagged it. Getting ahead of it saved us significantly.”
Frequently Asked Questions
Do I need to file a US tax return if I live in Hong Kong and earn only HK income?
Yes, if you are a US citizen or green card holder. The US taxes worldwide income regardless of where you live. However, the Foreign Earned Income Exclusion (FEIE) under IRC s.911 allows you to exclude up to USD 126,500 (2024) of foreign earned income, and the Foreign Tax Credit can offset remaining US tax with HK salaries tax paid.
What is FBAR and what are the penalties for non-filing?
FBAR (Foreign Bank Account Report) — FinCEN Form 114 — must be filed by any US person with a financial interest in or signature authority over foreign bank accounts exceeding USD 10,000 in aggregate at any point during the year. Non-wilful violations: up to USD 10,000 per account per year. Wilful violations: up to the greater of USD 100,000 or 50% of account balance per year.
What is GILTI and does it apply to my HK company?
GILTI (Global Intangible Low-Taxed Income) is a US tax under IRC s.951A on the profits of Controlled Foreign Corporations (CFCs) — foreign companies ≥10% US-owned. If your HK company has a US shareholder owning ≥10%, that shareholder may owe US GILTI tax on the HK company's profits each year, even without a dividend. The effective GILTI rate is 10.5-13.125% (for individuals without the corporate 50% deduction).
Is there a tax treaty between the US and Hong Kong?
No. There is no double tax treaty between the US and Hong Kong. HK does not have a tax treaty with the US (the US-China DTA does not apply to HK). This means US persons in HK rely on the FEIE, Foreign Tax Credit (Form 1116), and other domestic relief provisions rather than treaty protection.
What is the IRS Streamlined Procedure?
The IRS Streamlined Foreign Offshore Procedure allows US persons residing outside the US who are behind on tax filings (non-wilfully) to catch up by filing 3 years of tax returns and 6 years of FBARs, with a 0% penalty (for overseas residents). This is the recommended path for most non-compliant US expats in HK.
If I renounce US citizenship, do I have US exit tax obligations?
Yes. Under IRC s.877A, "covered expatriates" (those with net worth ≥ USD 2M or average annual tax liability ≥ USD 190,000, or non-compliance over 5 years) are subject to a mark-to-market exit tax — deemed disposal of all worldwide assets at fair market value on the day before expatriation. HK company shares are included.
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