Are dividends taxable in Hong Kong for shareholders and companies?

Short version: Hong Kong does not tax ordinary dividends; it taxes salary.

Paid by a Hong Kong company: there is no dividend withholding tax, so the company pays the dividend gross. An individual shareholder does not pay salaries tax or profits tax on it. The company's profits were already taxed (or exempt) at company level.

Received by a Hong Kong company: a dividend from a corporation that is subject to Hong Kong profits tax is excluded from the recipient's assessable profits.

Foreign dividends: a dividend arising outside Hong Kong is normally treated as offshore and not taxable. The exception is the foreign-sourced income exemption (FSIE) regime, which can tax foreign-sourced dividends received in Hong Kong by a member of a multinational enterprise group (a group with at least one entity or permanent establishment outside the parent's jurisdiction). Relief applies if the entity meets the economic substance requirement or the participation exemption.

Not the same as salary: the Inland Revenue Department (IRD) looks at substance. If a payment is really remuneration for work done as a director or employee, it is taxed as salaries tax income no matter what it is called. Dividends must also be lawfully declared out of distributable profits under company law.

Check the position in the shareholder's own country: Hong Kong's treatment does not bind other tax authorities.