The Hong Kong Freeport remains as a magnet to foreign investors from across the world till now. Its competitive and straightforward trade system is what makes the city the favored country of foreign businesses for them to set up.
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Import Tax & Duty
Hong Kong, functioning as a freeport, refrains from imposing customs duties or VAT on imported goods. Instead, it solely applies excise tax to certain imported items.
- Liquor
- Tobacco
- Hydrocarbon oil
- Methyl alcohol
How to Calculate Excise Tax
There are four commodities subject to duties in Hong Kong. Each item has its own unique method of calculation based on specific criteria.
Liquor
- Alcoholic beverages with an alcohol content exceeding 30% by volume incur a 100% excise duty rate.
- For shipments containing less than 12 liters of liquor and lacking sufficient information, a fixed duty of HKD 169 per liter applies.
- Excise duty exemptions include all beverages with an alcohol content below 30% by volume and all types of wine, regardless of alcohol strength.
Tobacco
- HKD 2506 per 1000 cigarettes.
- HKD 3228 per kilogram of cigars.
- HKD 615 per kilogram of Chinese-prepared tobacco.
- HKD 3036 per kilogram of other manufactured tobacco, excluding tobacco intended for cigarette manufacturing.
A cigarette exceeding 90mm in length without any filter or mouthpiece is considered as if each additional 90mm or portion thereof is a separate cigarette for taxation purposes.
Hydrocarbon oil
- HKD 6.51 per liter for aircraft spirit.
- HKD 6.82 per liter for leaded petrol (motor spirit).
- HKD 6.06 per liter for unleaded petrol (motor spirit).
- HKD 2.89 per liter for light diesel oil.
- HKD 2.89 per liter for ultra-low sulfur diesel.
Methyl Alcohol
- HKD 840 per hectolitre at 20 degrees Celsius for methyl alcohol and any mixture containing methyl alcohol.
- HKD 28.10 per hectolitre for each 1% increase in alcohol strength by volume exceeding 30%.
Duties and Import Tax Threshold Exemption
Except for the excise tax on those particular goods, all imports will be duty free, exempt from customs duty and value added tax (VAT).
Payment Method
After the duty assessment for a Removal Permit for Duty-Paid Goods is finalized, the Hong Kong Customs Department will inform the permit applicant about the payable duty through a payment notification sent via three designated electronic service providers.
The applicant may pay duty via:
- Visiting any branch of the Bank of China (Hong Kong) to make a payment in cash or by cheque.
- Utilizing the Bank of China (Hong Kong) Cheque Deposit Machine.
- Accessing the online banking service offered by the Bank of China (Hong Kong).
- Leveraging a mobile banking application or e-wallet compatible with Government QR code bill payment to scan the FPS QR code printed on the Payment Notification.
Prohibited or Restricted Import Goods in Hong Kong
Prohibited or restricted import goods in Hong Kong include:
- Firearms
- Fireworks
- Explosives
- Psychotropic substances
- Controlled chemicals
- Animals (especially endangered species)
- Dangerous drugs
- Rough Gems
- Specific food as well as drinks (e.g. meat, poultry, eggs, and powdered formula)
Importing prohibited or restricted items into Hong Kong carries the risk of fines or imprisonment. Despite Hong Kong’s status as a free port, the process of shipping excise goods nationally and internationally still entails a cumbersome burden of application and documentation submissions.
How FastLane Group Can Help?
Now you recognize, that Hong Kong easily can be used as a shipment destination because it is a free port. While this is the case, getting excise goods nationally and internationally is still a tiresome burden in application and documentation submissions. Our team of tax experts at Fastlane can help you with the documentation for tax planning, compliance, and reporting for your import tax or duty tax in Hong Kong.
Contact us now.to get a consultation and professional tax services.
Frequently Answered Questions
Hong Kong functions as a free port and does not impose customs duties on imports. However, certain goods such as liquor, tobacco, hydrocarbon oil, and methyl alcohol, which meet specific tax criteria, are subject to Hong Kong’s excise tax. Your item is required to pay excise tax if it falls under one of the following categories:
- Liquor with an alcoholic strength exceeding 30% by volume at 20 degrees Celsius.
- Tobacco products including cigarettes, cigars, Chinese prepared tobacco, and other manufactured tobacco, except for tobacco intended for manufacturing cigarettes.
- Hydrocarbon oil, encompassing aircraft spirit, motor spirit, light diesel oil, and ultra-low sulfur diesel.
- Methyl alcohol or any mixture containing alcohol.
Hong Kong functions as a free port without imposing customs duties. Nevertheless, imported goods may incur excise duty if they meet the criteria outlined by the Hong Kong Customs and Excise Department. The rates of excise duty are determined based on the quantities of the imported goods, if applicable.
The duties and taxes are typically paid by the recipient. However, both the recipient and the sender have the option to handle customs payment clearance.
There is no VAT imposed on imports in Hong Kong.