Hong Kong adopts a territorial basis for taxing profits derived from a trade, profession, or business carried on in Hong Kong. Profits Tax is only charged on profits which arise in or are derived from Hong Kong. In simple terms this means that a person who carries on a business in Hong Kong but derives profits from another place is not required to pay tax in Hong Kong on those profits.

Due to climate change and the continuous introduction of related regulatory measures, many companies' business models, cash flows, financial conditions, and operational performance will be affected. Certain companies or industries will be more significantly impacted. The effects of climate change on businesses have also become an increasingly important topic of concern for investors and other stakeholders. The International Financial Reporting Standards (IFRS) have not specifically provided guidance on the financial impact of climate change.