Approved Charitable Donations: A Tax Deduction Guide for Hong Kong Freelancers 2026

This article is general information as of August 2026 and is not tax advice. Rules can change. Always confirm the latest details with the Inland Revenue Department (Charitable Donations and Tax-Exempt Charities) and GovHK (Approved Charitable Donations), or consult a qualified tax adviser.

If you are a freelancer or run a small business in Hong Kong and you give to charity, those gifts may reduce your tax bill. Hong Kong lets you deduct approved charitable donations against your profits or income, up to a generous ceiling. But the rules are specific: the charity must be approved, you must keep the receipts, and there is a cap of 35% of your assessable profits or income. This guide explains how the deduction works for self-employed people in the 2025/26 year of assessment, and how to make sure you actually get it.

What counts as an approved charitable donation

An "approved charitable donation" is a donation of money to a charitable institution or trust of a public character that is exempt from tax under section 88 of the Inland Revenue Ordinance, or a donation to the Government of the Hong Kong SAR for charitable purposes. Two points follow from this:

• It must be money. Gifts of goods, services, or your time are generally not deductible as approved charitable donations.

• The recipient must be approved. Only donations to IRD-recognised section 88 charities (or the HKSAR Government) qualify. The IRD publishes a list of tax-exempt charities you can check before you give.

Donations that come with a material benefit in return — for example, buying a raffle ticket, a gala dinner seat, or goods at a charity bazaar — are typically not deductible, because you received something of value in exchange.

The 35% cap and the HK$100 floor

Two thresholds define the deduction:

• Minimum: the aggregate of your approved charitable donations for the year of assessment must be at least HK$100.

• Maximum: the deduction is capped at 35% of your assessable profits (for profits tax) or assessable income (for salaries tax or personal assessment) for that year of assessment.

In other words, you can give more than 35% of your income to charity, but you cannot deduct more than 35% in a single year. The portion above the cap does not carry forward for individuals in the ordinary way, so timing your giving matters.

Where freelancers claim the deduction

How you claim depends on how your income is taxed. Hong Kong has three separate charges, and your business structure determines which applies:

Sole proprietors and partners: profits tax

If you run an unincorporated business, your net profit is charged to profits tax. Unincorporated businesses benefit from the two-tiered rates: 7.5% on the first HK$2 million of assessable profits and 15% on the balance. Approved charitable donations paid through the business can be deducted against assessable profits, subject to the 35% cap.

Employees with a side business: salaries tax

If you also have employment income, donations can be claimed against your salaries tax income instead. You cannot, however, claim the same donation under both salaries tax and profits tax — a donation can only be deducted once.

Combining both: personal assessment

If you have both business profits and salary, electing personal assessment aggregates your income and lets your total approved donations be deducted against your combined income, which can be more efficient. Whether personal assessment helps depends on your full picture, so it is worth modelling both ways.

A worked example

Suppose you are a freelance consultant operating as a sole proprietor. In 2025/26 your assessable profit is HK$600,000, and during the year you donated HK$50,000 to an IRD-approved children's charity.

• Your 35% cap is HK$600,000 x 35% = HK$210,000.

• Your donation of HK$50,000 is well below the cap and above the HK$100 floor, so the full HK$50,000 is deductible.

• Your assessable profit falls to HK$550,000 before allowances, reducing the profits tax you pay.

Now suppose instead your assessable profit was only HK$100,000 but you donated HK$50,000. Your cap would be HK$35,000, so only HK$35,000 of the donation is deductible this year — the remaining HK$15,000 gives no tax benefit. Spreading large gifts across years, or timing them to higher-profit years, helps you stay within the cap.

Records you must keep

The deduction stands or falls on documentation. The IRD can ask you to prove your donations, and Hong Kong requires business records to be kept for seven years. To protect your claim:

• Keep the official receipt issued by the charity for every donation. The receipt should show the charity's name, the date, the amount, and usually a reference to its section 88 status.

• Do not claim donations where you received a benefit (dinners, merchandise, lucky draws).

• Keep a simple running list of donations through the year so you can total them at filing time and check you are above HK$100 and within the 35% cap.

Paper receipts fade and get lost. Digitising them as you go means the figure on your return is backed by evidence you can retrieve instantly if the IRD asks. Tools like Denpyo let you photograph a donation receipt and automatically capture the date, payee, and amount, filing it alongside your business expenses so your year-end totals are ready. To sanity-check whether a particular payment is deductible, our expense deductibility checker is a quick first step, and the tax savings estimator helps you see the impact of deductions on your bill.

Common mistakes to avoid

• Giving to an unapproved organisation. A worthy cause is not the same as a section 88 charity. Check the IRD list first.

• Claiming donations with a benefit attached. Charity dinners and raffle tickets are not approved charitable donations.

• Double-claiming. The same receipt cannot be used under both salaries tax and profits tax.

• Ignoring the cap in a low-profit year. A large gift in a lean year wastes deduction you could have used.

• Losing the receipt. No receipt, no deduction — keep everything for seven years.

Summary

Approved charitable donations are one of the simpler deductions available to Hong Kong freelancers and small businesses: give money to a section 88 charity or the Government, keep the receipt, and deduct up to 35% of your assessable profits or income, provided the total is at least HK$100. The keys to getting the full benefit are choosing approved recipients, avoiding donations that come with a benefit, and keeping clean records for seven years. If you have both business and employment income, compare claiming under profits tax, salaries tax, and personal assessment to see which gives the best result. Give generously — and let good record-keeping make sure the tax system rewards it.