Hong Kong Profits Tax Return: Exchange Rate for Accounts Kept in a Foreign Currency

Many Hong Kong companies keep their books in US dollars or renminbi. The profits tax return does not: every amount on it is in Hong Kong dollars. This guide covers what the Inland Revenue Department (IRD) asks for and which rate tables support the conversion.

What the IRD requires

The notes to the profits tax return are short on this point. All amounts must be shown in Hong Kong dollars, excluding cents. If the financial statements are prepared in foreign currencies, the amounts are converted into Hong Kong dollars before the return is completed, and the conversion rate used must be stated. The IRD then points to its own table of exchange rates for the major currencies.

That is the whole rule in the return notes. The IRD pages do not prescribe an average over a closing rate, do not name a list of accepted sources, and do not say its own table is mandatory. What they require is a stated, supportable rate.

The IRD average rate table for profits tax

The IRD posts "Average Exchange Rates of Major Foreign Currencies for Profits Tax Purposes" for each year of assessment from 2006/07.

• One average rate per currency, with no buying and selling split (unlike the salaries tax tables).
• Rows are keyed by accounting year-end: "for year ending on last day of month". A company with a 31 December year-end reads the December row; a 31 March year-end reads March.
• Eight currencies: US dollar, sterling, Canadian dollar, Swiss franc, Japanese yen, Australian dollar, euro and renminbi.
• On 11 November 2026 the 2026/27 page ran to October 2026, where the US dollar figure was 7.8238.

What the accounting standard says

The IRD's practice note on financial instruments and foreign exchange differences, DIPN 42 (revised June 2020), restates HKAS 21: a foreign currency transaction is recorded at the spot rate on the date of the transaction, and foreign currency monetary items are translated at the closing rate. HKAS 21 allows a rate that approximates the actual rate, such as an average for a week or a month, unless rates fluctuate significantly.

The same note records that a non-Hong Kong company may keep its Hong Kong branch accounts in its home currency, but that assessable profits or losses for each year must be expressed in Hong Kong dollars.

Currencies and dates the IRD table does not cover

Eight currencies leave out the Singapore dollar, the won, the ringgit, the baht, the rupee and most of a regional group's ledger. For those, and for any single date, two official Hong Kong series are available through one API:

# a year of HKMA daily USD figures, to compute your own average
curl "https://allratestoday.com/api/v1/central-bank/hkma/history?symbol=USD&from=2025-01-01&to=2025-12-31&format=csv" \
  -H "Authorization: Bearer YOUR_API_KEY"

# the HKMA table for a year-end date
curl "https://allratestoday.com/api/v1/central-bank/hkma/2025-12-31" \
  -H "Authorization: Bearer YOUR_API_KEY"

For orientation, averaging the HKMA daily series gives these figures. They are computed from the HKMA data, not taken from the IRD table, so expect small differences.

A practical routine

1. Decide the method once: the IRD table row for your year-end, or an average or closing rate from a named official series.
2. State the rate on the return, as the notes require.
3. Keep the table or the API response with the tax computation.
4. Use the same method each year.

This guide describes the rules as the Inland Revenue Department and the other bodies publish them, read on 11 November 2026. It is not tax advice; confirm the treatment for your facts with your accountant.

FAQ

Must a Hong Kong profits tax return be in Hong Kong dollars?

Yes. The IRD's notes say all amounts must be shown in Hong Kong dollars. If the financial statements are in a foreign currency, the amounts are converted before the return is completed and the conversion rate used is stated.

Does the IRD publish exchange rates for profits tax?

Yes. It posts average exchange rates of major foreign currencies for profits tax purposes for each year of assessment from 2006/07, with one row for each accounting year-end month, covering eight currencies.

Is the IRD average rate table mandatory?

The IRD pages do not say so. The return notes require the amounts to be converted and the conversion rate to be stated, and point to the table as a source for the major currencies.

Where do I get rates for currencies outside the IRD table?

The HKMA daily figures cover 17 currencies back to 1981 and the HKAB official daily table covers 22. Both are available through the AllRatesToday API.