Hong Kong is the easiest jurisdiction in Asia Pacific for accounting and tax compliance, and fourth-easiest globally - according to TMF Group's Financial Complexity Index 2018.
Hong Kong retains its position as the easiest jurisdiction in Asia Pacific for accounting and tax compliance, and fourth-easiest globally - according to TMF Group's Financial Complexity Index 2018.
The leading provider of global business and compliance services ranked 94 jurisdictions across Europe, the Middle East, Africa, Asia Pacific and the Americas; 1 being most complex through to 94 the least complex.
While Hong Kong came in at 91st, China is at number 1 taking the top spot in this year's Index. For a second year, the Cayman Islands came in at 94th as the least complex place for financial compliance.
To determine the rankings with its in-country experts, TMF Group used a 74-question survey with weighted complexity parameters, namely; regulatory compliance, tax, statutory reporting and bookkeeping.
The 10 most complex jurisdictions for financial compliance
The 10 least complex jurisdictions for financial compliance
Commenting on Hong Kong's ranking, TMF Group's Regional Director for Asia Pacific, Paolo Tavolato said: "Hong Kong has a much simpler taxation system compared to other jurisdictions. There are only three direct taxes in the city – salaries tax, corporate income tax and property tax – and no sales tax and VAT.
"The system also has some special features. Taxes are only levied on a territorial basis, which means that only income arising in or derived from Hong Kong is taxable; worldwide income is not taxable, no matter what the residential status of the taxpayers is.
"While Hong Kong is one of the least complex jurisdictions in the world for financial reporting, it still has some key regulatory requirements. For example, accounting records should be preserved for seven years and in case of non-compliance with bookkeeping requirements, directors are personally liable for a fine of HK$300,000.
"When it comes to cross-border business success, knowing and understanding the local requirements for financial compliance can prove vital. Seeking the support of in-country experts – such as TMF Hong Kong – allows companies of all sizes to maintain focus on their core business."
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