Low profits tax: Hong Kong imposes a low and competitive profit tax rate on corporations, capped at 16.5 percent. Data center operators can benefit from this favorable tax rate, which helps maximize profitability.
No indirect tax: Hong Kong does not impose value-added tax (VAT) or goods and services tax (GST), making it a cost-effective location for data centers to set up as the cost of key services and components required is substantially reduced.
Tax exemptions and deductions for capital expenses: Hong Kong offers various deductions and allowances for capital expenses related to business operations, which include data center construction and equipment. This includes tax depreciation of fixed assets and deductions of R&D expenses.
Double taxation agreements (DTAs): Hong Kong has an extensive network of DTAs, which help to reduce the risk of double taxation for operators from countries that have entered into a DTA with Hong Kong.
No withholding tax: There is no withholding tax on dividends, interest, or royalties paid from Hong Kong, making it an attractive location for multinational companies.
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