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Hong Kong Tax
Rules
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Hong Kong Taxation¡G |
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| 1. |
3 Major taxes
in Hong Kong¡GProfits Tax¡BSalaries
Tax and Property tax.
In some circumstances, tax payer may select Personal Assessment¡Ato
add up all income (salary + profits + property income of himself
and his wife) for tax minimization purpose. |
| 2. |
Tax deadline:
Sole proprietorship: 3 months; partnership
and corporations: 1 month with extension
allowed.
Date of issuing tax return: First return: 18 months after
company formation, recurrent return: 2 May (sole proprietorship),
1 April (Partnership / Corporation) |
| 3. |
Estimated assessment
maybe imposed in the following case¡G |
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(a) |
Not filing return
in a specific time, |
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(b) |
Filed return not
accepted by IRD, |
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(c) |
Incomplete business
records . |
| Objection
on notice of assessment must be lodged within 30 days after
issuing date. |
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Profits Tax¡G |
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- Tax is based on net assessable profit, no sales / service tax.
- Offshore profits are exempted from tax¡C
- Profits Tax (2023/24)¡G¡Ð Corporations¡G16.5%¡AUnincorporated
business ¡G 15%
- Assessable profit ¡× Net profits + undeductible expenses - depreciation
allowance
*
Undeductible expense: Private expense, proprietor / partner (and
spouse) salaries;
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Salaries Tax¡G |
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| 1. |
Income from Hong
Kong employments are subject to salaries tax. |
| 2. |
Anyone visiting
Hong Kong for less than 60 days are exempted from salaries tax |
| 4. |
Chargeable income
¡× Total income ¡Ð deductions ¡Ð Personal allowance |
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(a) |
Lower of tax amount
computed from progressive rates and standard rate. |
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(b) |
Deductions includes¡G |
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Charitable
donations, MPF / provident fund contributions, self-education
expense, Home loan interest, those expense wholly, necessarily
and exclusively to incurred for generating the chargeable
income. Private and capital expenses are not deductible. |
| 5. |
Allowance
for Year 2023/24 |
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- Basic allowance¡GHK$132,000
- Married person allowance¡GHK$264,000
- Child allowance¡GFirst to Ninth (Each one)¡GHK$130,000
- Dependent parents / grandparents¡GHK$50,000
(HK resident and at least 60 year-old)
- Dependent parents / grandparents¡GHK$25,000
(HK resident and at least 55 year-old)
- Additional allowance for dependent¡G HK$50,000
(at least 60 year-old)
- Additional allowance for dependent¡G HK$25,000
(at least 55 year-old)
- Single parent allowance¡G HK$132,000
- Disabled dependent allowance¡GHK$75,000
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| 6. |
Salaries
tax rate |
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(a) |
Progressive
rate (2023/24)
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First HK$50,000:
2%
Next HK$50,000:
6%
Next HK$50,000:
10%
Next HK$50,000:
14%
Residue: 17%
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Or (b) |
Standard
rate ¡GAssessable profits X
15%
*Lower of (a) and (b) * |
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Profits Tax¡G |
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- Rental income from properties situated in Hong Kong¡C
- Tax rate 15%
(2023/24)
- Assessable value: 80% of total rental income (20%
regarded as decorations and improvements)
- 20%
deductions is a clear cut rate.
Corporation that holding
property for rental income may select profits tax rather than property
tax to avoid double taxation.
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