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Hong Kong - Income Tax


Professional taxation advice is an essential requirement for every expat.

If you need advice, please use our enquiry form

Income tax and expat taxation is slightly different in Hong Kong than in other countries. Citizenship or residency isn’t necessarily considered when determining taxation. Any person who resides in Hong Kong for 60 days or more is subject to salary tax. However, salary tax is only considered for income that comes from business conducted inside of Hong Kong. If you have foreign income or assets then these are not taxed.

Both residents and expats are taxed at either a progressive 2% to 17%, depending on their income level, or a standard rate of 15%. Hong Kong does not have a capital gains tax.

It is important to keep in mind that, as an expat, you are generally still responsible for filing taxes in your home country. Even if you don’t have to file a tax return in your home country for income earned, you might still need to file one if you have property or own other assets. Tax rules and regulations will vary by country and government.

Most residents of Hong Kong do not suffer from double taxation. Only income sourced in Hong Kong is subject to tax. A lot of countries which tax their residents on a worldwide basis also offer them unilateral tax credit relief for any Hong Kong tax paid on income / profit derived there. For more information regarding double taxation and how it might affect expats from different countries, visit the following:

Department of Justice
Treaties and International Agreements
International Law Division
Department of Justice
Tel: +852 28674249
Fax: +852 28772130
e-mail:ild@doj.gov.hk
http://www.legislation.gov.hk/table6ti.htm

Tax is completed on a personal tax return basis. It is not pay as you earn. When you begin working, it is suggested that expats begin setting money aside so than when it is time to file a tax return and pay taxes, there will be ample funds to pay the fees. The bill arrives from the Hong Kong Inland Revenue in a green envelope. If you are chargeable to tax for any year of assessment, the Inland Revenue Department (IRD) has to be notified in writing no more than 4 months after the end of the basis period for the year in which you are so chargeable. You do not have to notify the IRD if you have already received a return from them. If you do receive a tax return, it must be completed and submitted by the due date.

The following income must be reported in your tax return: pensions; salaries, wages, fees, and director’s fees; tips; salary tax paid by employer; commissions, bonuses, leave pay and gratuities; allowances, perquisites and fringe benefits; retirement benefits; termination payments; share awards and share options; back pay, contract gratuities, deferred pay and pay in arrears. You do not have to report jury fees or severance payments.

When you leave Hong Kong, the Inland Revenue Ordinance (IRO) declares that you must notify them no later than 1 month before your departure date. When the IRD receives the notification, it will determine if you are required to settle all tax liabilities before departure. The IRO also provides that those who travel frequently for their occupation do not have to send notification of their departure. Instead, they must file tax returns and pay taxes annually.

Taxes can be paid in a variety of ways. Electronic tax payment is becoming increasingly popular. You can pay your taxes by telephone, Internet or even ATM. For more information, visit the Inland Revenue Department of Hong Kong: http://www.ird.gov.hk/eng/welcome.htm

Inland Revenue Department
Central Enquiry Counter
1/F, Revenue Tower
5 Gloucester Road, Wan Chai
Hong Kong
Tel: 852 187 8088
http://www.ird.gov.hk/eng/welcome.htm



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