Tax Talk: Comparing Hong Kong vs Singapore Tax Systems in 2025

For decades, Hong Kong and Singapore have been locked in a tax rivalry that mirrors their broader contest for influence as Asia’s leading business hub.

It’s a battle fought not with tariffs or militaries, but through tax policy, where rates, incentives, and exemptions signal each jurisdiction’s intent to attract investment and global headquarters. As global tax rules tighten and digitalisation transforms compliance, the lines between the two cities are once again being redrawn.

Why does this matter? Because the structure of your regional operations, your tax exposure, and even your investor appeal may hinge on what these cities do next. In 2025, decisions about where to base a holding company, set up a family office, launch a new venture, or repatriate profits are more sensitive to tax than ever.

This article breaks down Hong Kong vs Singapore tax systems—comparing corporate and personal rates, cross-border implications, and what these differences mean for your business strategy.

Hong Kong vs Singapore: Corporate Income Tax (CIT) 

Hong Kong and Singapore both offer attractive corporate tax regimes in 2025, though their underlying frameworks differ substantially.

Hong Kong Corporate Tax

Hong Kong, by contrast, uses a two-tier system: profits up to HKD 2 million are taxed at 8.25%, while profits above that are taxed at 16.5%. Only one entity per group can claim the reduced rate. A one-off 100% profits tax reduction, capped at just HKD 1,500, applies for the 2024/25 year.

Hong Kong’s system remains territorial, taxing only profits sourced in Hong Kong. However, the Foreign-Sourced Income Exemption (FSIE) regime, expanded in 2024, now brings certain foreign income into scope unless economic substance or participation exemption criteria are met.

Read more: Hong Kong Corporate Tax Guide 2025: Rates, Benefits, and Planning Strategies

Singapore Corporate Tax

Singapore applies a flat 17% corporate income tax rate across the board, with no tiers or surcharges. To support new businesses, it offers partial exemptions: 75% exemption on the first SGD 10,000 of chargeable income, and 50% on the next SGD 190,000. Start-ups enjoy a more generous scheme in their first three years, with 75% exemption on the first SGD 100,000 and 50% on the next SGD 100,000 of income, subject to conditions.

For 2025, Singapore introduced a 50% tax rebate, capped at SGD 40,000, along with a SGD 2,000 cash grant for eligible companies that employed local staff and made CPF contributions in 2024. Additionally, large multinational enterprises with consolidated global revenue exceeding SGD 1.2 billion are now subject to OECD Pillar Two rules, including a Domestic Top-up Tax, to ensure an effective minimum rate of 15%.

Hong Kong vs Singapore: Personal Income Tax (PIT)

Hong Kong and Singapore take very different approaches to taxing individuals, with distinct rules on scope, rates, and reliefs.

Hong Kong Personal Income Tax Rates

Hong Kong applies progressive rates from 2% to 17% on net chargeable income. A standard rate cap limits total tax to 15% on the first HKD 5 million and 16% thereafter, calculated before allowances.

Only income sourced from employment in Hong Kong is taxed. Foreign earnings and most passive income are excluded. For YA 2024/25, residents benefit from a 100% tax reduction capped at HKD 1,500. 

Key Allowances that Reduce Hong Kong Salaries Tax (YA 2024/25)

Hong Kong’s progressive rates are only half the story. The other half is the generous suite of allowances that taxpayers can claim to shrink their chargeable income. For the Year of Assessment 2024/25, the headline figures are for the Year of Assessment 2024/25 are:

Claiming the relevant allowances, whether for children, elderly parents, or disabled dependants can meaningfully reduce a taxpayer’s effective rate, especially for families with multiple dependants.

Singapore Personal Income Tax Rates

Singapore taxes residents on income earned in Singapore. Most foreign-sourced income is not taxed, unless received through a business or partnership in Singapore. Rates are progressive, beginning at 0% and rising to a top rate of 24% on chargeable income over SGD 1 million. For the Year of Assessment 2025, a 60% income tax rebate capped at SGD 200 applies.

Non-residents pay 15% on employment income or the resident rate, whichever is higher. Other income types, including director’s fees and rental income, are taxed at 24%.

Residents may claim reliefs for family dependents, CPF contributions, SRS top-ups, education expenses and more. These deductions are capped at SGD 80,000 per taxpayer.

Read more: Understanding the Global Minimum Tax: How OECD Pillar Two Affects Hong Kong Businesses

Hong Kong vs Singapore: Indirect Taxes

Hong Kong and Singapore take very different approaches to indirect taxation.

Hong Kong Indirect Taxes

Hong Kong does not impose any form of VAT or GST. It relies instead on narrower taxes. These include stamp duty on real estate and shares, property tax at 15% on rental income, and a reinstated 3% hotel tax. 

Singapore Indirect Taxes

Singapore charges Goods and Services Tax (GST) at 9% on most goods and services, including imports. Financial services, residential property, and digital payment tokens are exempt. Exports and international services are zero-rated.

There are other levies in Singapore. Property tax ranges from 0% to 32% for owner-occupied residential properties and up to 36% for others. Stamp duties apply to property and share transactions, with additional charges for non-residents and multiple-property owners. Singapore also applies a carbon tax, currently SGD 25 per tonne of emissions (for those producing 25,000 tonnes or more of CO2 per year), rising to SGD 45 in 2026.

The key difference here is that Singapore essentially spreads indirect tax across the entire economy, while Hong Kong concentrates it in specific sectors. Each model brings its own trade-offs in administration, cost, and visibility.

Hong Kong vs Singapore: Tax Incentives for Business

Both Hong Kong and Singapore offer targeted tax incentives to attract investment, but the structure and delivery of these incentives differ. Both countries offer too many specific incentives to list in this article, but here are the top-line highlights: 

Hong Kong Tax Incentives for Business

Hong Kong uses a mix of super-deductions and full or partial exemptions. Notable features include:

• R&D and IP
  • 300% deduction on the first HKD 2 million of qualifying R&D spend; 200% thereafter
  • Patent Box regime: 5% tax on qualifying IP income
• Funds & Family Offices
  • Unified Fund Exemption for expanding the definition of various funds; carried interest may also qualify
• Shipping & Trading
  • 0% rate for qualifying ship lessors
  • Reduced rates proposed for aircraft leasing and commodity trading

Singapore Tax Incentives for Business

Singapore uses a combination of concessionary tax rates and enhanced deductions. 

• R&D and IP
  • 400% tax deduction on the first SGD 400,000 of qualifying R&D spend
  • Intellectual Property Development Incentive (IDI) offers rates as low as 5% for income from qualifying IP
• Investment & Expansion
  • Development and Expansion Incentive (DEI): 5%, 10% or 15% tax rate for qualifying expansion projects
• Financial Sector & Funds
  • 13O and 13U schemes exempt income for qualifying funds, including family offices
  • Financial Sector Incentive (FSI): lower rates for fund managers, family offices, and treasury centres

Both jurisdictions focus their incentives on mobile, high-value sectors: fund management, intellectual property, and maritime. Singapore tends to use tiered tax rates and enhanced deductions to support long-term investment and onshore substance. Hong Kong, on the other hand, leans toward full exemptions and tax certainty to appeal to groups that prioritise light-touch administration and cross-border mobility.

Read more: Guide to Taxation and Accounting in Hong Kong

Hong Kong vs Singapore: Capital Gains, Dividends & Inheritance Tax Treatment

Neither Hong Kong nor Singapore taxes capital gains, dividends from local companies, or inheritance.

In Hong Kong, capital gains are excluded from profits tax, and dividends from local companies are not taxed. A tax certainty scheme applies to equity disposals meeting a 15% ownership threshold and a 24-month holding period.

In Singapore, capital gains are also not taxed, and the one-tier corporate tax system means dividends are tax-exempt. A safe harbour rule under Section 13W excludes gains on ordinary share disposals held for at least 24 months and 20% ownership.

Estate duty has been abolished in both jurisdictions.

Hong Kong vs Singapore: Tax Treaties and Double Taxation Agreements (DTAs)

Hong Kong’s network is smaller than Singapore (51 tax treaties), but expanding. In the 2025/26 budget, the government confirmed plans to negotiate agreements with 17 more jurisdictions. This is part of a stated objective to widen treaty access for businesses operating across borders.

Singapore has over 100 DTAs, covering a wide mix of economies. These treaties reduce withholding tax on interest, royalties, and dividends, and allocate taxing rights across jurisdictions.

While Singapore’s extensive DTA network offers broad coverage for tax structuring, Hong Kong’s approach, rooted in its territorial principle that largely exempts foreign-sourced income, provides a different strength for businesses that move capital and contracts across borders without needing a substantial physical presence.

Hong Kong vs Singapore: Tax Administration & Compliance

Hong Kong uses a 1 April to 31 March tax year. Filing dates vary depending on the financial year-end and taxpayer classification. The IRD’s digital platform rollout includes e-filing for MNEs under Pillar Two. Taxpayer identification, recordkeeping and top-up tax processes have been codified in new legislation.

Singapore assesses tax on a calendar-year basis, with returns filed in the following Year of Assessment. Corporate taxpayers file via Form C, Form C-S, or C-S (Lite), depending on revenue and complexity. The government has also mandated e-invoicing adoption, and links tax administration closely with CPF systems.

Singapore’s model is modern, fixed and standardised. Hong Kong’s system is also modern, but more variable, with timing linked to accounting periods.

Read more: Guide to Tax Compliance and Annual Filing in Hong Kong

Summary: Key Differences and Similarities

Companies evaluating Asian expansion face distinct options with Hong Kong and Singapore, each supporting different operational approaches through their tax frameworks.

Hong Kong works well for organisations managing capital and agreements across multiple regions without requiring substantial physical infrastructure. The territorial tax system provides clear benefits: income earned outside Hong Kong typically avoids local taxation, which reduces tax exposure for international activities. Administrative processes remain simple, without GST or VAT creating extra compliance work. The two-tier profits tax (charging 8.25% on the first HK$2 million and 16.5% above) gives additional savings for smaller entities. This structure serves companies coordinating regional commerce or supervising overseas investments effectively.

Singapore attracts businesses building significant local operations with teams, systems, and direct management on-site. Tax benefits support firms placing regional headquarters, financial operations or intellectual property ownership locally. The comprehensive treaty network helps control withholding taxes and international profit movements. The GST involves administrative processes, yet provides systematic input tax recovery mechanisms for larger operations.

Of course, the best location varies with each company’s profile. Important considerations include decision-making locations, revenue generation methods, and intended physical establishment levels. Companies prioritising structural adaptability, international capital movements, simplified administration and tax exemptions for foreign income will find Hong Kong particularly well-suited to these requirements.

Where to Next?

Tax decisions carry long-term consequences. The right jurisdiction isn’t always the one with the lowest rate – it’s the one that fits how your business works, how your income is sourced, and how your operations are structured.

InCorp works with investors, founders, and multinationals that need clear, practical answers on tax structuring in Hong Kong and Singapore. We advise on what’s available, what’s changing, and what applies – and then help implement it.

If your next move crosses borders, speak to a team that operates on both sides.

Contact InCorp today to explore your options.