There is no single piece of legislation which governs charities in Hong Kong, nor is there any system of oversight or regulation to ensure that donations are properly applied to the purposes for which they are solicited. There is also no statutory definition of what constitutes a charity or a charitable purpose. Exemption from income or profits tax can be claimed from the Inland Revenue Department by an approved charitable institution or trust of a public character, but that department is not responsible for registering charities, or for monitoring their conduct. There is also no statutory requirement in Hong Kong for charitable organisations to submit annual reports or accounts reporting their finances. Instead, the Hong Kong Inland Revenue Department will only call for accounts, annual reports or other documents for the purpose of reviewing the exemption status of a particular organisation so as to ensure that the organisation is still charitable and its activities are compatible with its objects, but this inspection of accounts of charitable organisation is not mandatory under the existing law.

In a number of other jurisdictions there is legislation governing charities, in some cases empowering an organisation to supervise charities and ensure that they are administered correctly. Some legislation enables the supervisory body to advise charitable institutions on matters of good governance and to issue guidelines or recommendations on the practice to be observed by charities and those concerned with their management or administration.

The Commission has been asked to review the law and regulatory framework relating to charities in Hong Kong. A sub-committee has been appointed and held its first meeting in November 2007.

The members of the Charities Sub-committee are:

Mr Bernard C Chan, GBS, JP, Chairman of the Hong Kong Council of Social Service (Chairman)

Mr John Budge, SBS, JP, Partner of Wilkinson & Grist, Solicitors

Mrs Pamela Chan, BBS, JP, former Chief Executive of the Consumer Council

Ms Christine Fang, BBS, JP, Chief Executive of the Hong Kong Council of Social Service

Mr Adam Koo, CEO of WWF Hong Kong

Mr Herbert Tsoi, BBS, JP, Partner of Herbert Tsoi & Partners, Solicitors

Ms Florence Wai, CEO (Lotteries Fund), Social Welfare Department

Mr Leonard Wong, Chief Assessor (Special Duties), Inland Revenue Department

The Sub-committee's Secretary is Ms Kitty Fung, Senior Government Counsel.