Hong Kong “Share Transfer” Stamp Duty Calculation (Applicable to Hong Kong Limited Company Shares Only)
- Tax rate and calculation basis
– Tax rate**: 0.2 %（買賣雙方各付0.1%, for a total tax rate of 0.2% of the transaction amount).
– Tax basis: whichever is higher of the “actual consideration” or “market value of shares” of the shares.
- Gratuitous transfer (gift)
– If there is no consideration for the transfer (e.g. a gift from a relative), stamp duty will still be calculated based on the market value of the shares.
– However, exemption may be made in some cases (supporting documents such as statutory declarations are required).
Key Details & Exemptions:
- Scope of application
– Only applicable to the transfer of shares in a Hong Kong registered limited company.
- Exemption conditions
– Internal Organisation: An exemption may be applied for for a qualifying intra-group transfer under Part XIVA of the Companies Ordinance.
– Relative transfers: Evidence of no business purpose (e.g., distribution of family assets) is required, but may still be subject to market value.
- Declaration and payment
– Instrument of Transfer** and tax must be paid within 30 days of the transfer.
– Late fines: up to 10 times the tax.
Process:
- Assess the value of shares
– Refer to the company’s net assets, recent transaction history, or professional valuation reports.
- Make a file
– Use of Contract Notes (usually handled by a secretarial company, in some cases by a solicitor).
- Pay stamp duty
– Obtain a stamp certificate through the website of the Inland Revenue Department of Hong Kong or in person.
- Complete the transfer
– Submit the stamped document to the Companies Registry for updating the register of members.
Inland Revenue Department (IRD) https://www.gov.hk/tc/residents/taxes/etax/services/share_transfer_computation.htm
