Hong Kong Healthcare & Clinic Tax — Expert Advisory

Incorporation can offer significant tax savings when a doctor's income exceeds approximately HKD 2-3M per year. A company pays 8.25% on the first HKD 2M profits and 16.5% thereafter, versus personal assessment at up to 15% for an individual. The doctor can also retain profits in the company at 16.5% rather than drawing all income personally. However, professional licensing requirements, MPF, and personal drawings must all be considered.

Yes. Professional indemnity insurance premiums are a deductible business expense for medical and dental practitioners. The insurance must be for professional liability directly connected to the practice. Premiums paid to the Medical Protection Society (MPS) or similar organisations are also deductible. Keep all insurance premium receipts as supporting documentation.

The treatment depends on the nature of the arrangement. If the locum has a contract of service (employee characteristics), they are employees and the practice must withhold salaries tax and make MPF contributions. If the locum operates their own practice and provides services on a contract for services basis (independent contractor), the practice issues IR56M and deducts the fee as a business expense. IRD applies a multi-factor test to determine status.

Most medical equipment qualifies as plant & machinery: diagnostic equipment (X-ray, MRI, CT, ultrasound), dental equipment (dental chairs, autoclaves, panoramic X-ray), physiotherapy equipment, laboratory equipment, medical IT systems (practice management software, diagnostic software), and medical furniture used in patient treatment. Initial allowance of 60% applies in the year of acquisition, with 20-30% annual allowance thereafter.

CPD course fees, medical conference registration fees, and professional journal subscriptions directly related to maintaining professional competence are generally deductible as business expenses for self-employed medical practitioners. For employed doctors, these would typically need to meet the "wholly, exclusively, and necessarily" test for an employee expense claim. Course fees paid by the employer are deductible to the employer.