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Banks & Taxes in Hong Kong
Taxes in Hong Kong: Further Info
Since Hong Kong is not one of the globe’s tax havens, doing your taxes in Hong Kong is unavoidable for all expatriates. Fortunately, the usual Hong Kong income tax rate is fairly low. Our InterNations GO! guide introduces you to the Hong Kong income tax for expats and to general taxation in Hong Kong.
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If you are an expat paying taxes in Hong Kong, there are a number of allowances and deductions on salaries tax and other forms of income tax which might be applicable to you.
Allowances and Deductions
There is a basic allowance which everyone paying taxes in Hong Kong is entitled to. During the last few assessment years, it usually amounted to around HKD 100,000, and rose to the current HKD 120,000 in 2012/13. This basic allowance is doubled when you are married. Furthermore, your assessable income in Hong Kong can be further reduced if you qualify for one (or several) of the following dependent allowances (amounts of allowances as of 2014):
- child allowance (HKD 70,000)
- dependent brother or sister allowance (HKD 33,000)
- dependent parent or grandparent allowance (HKD 20,000-40,000)
- single parent allowance (HKD 120,000)
- disabled dependent allowance (HKD 66,000)
You can find more details concerning the conditions for receiving these allowances on taxes in Hong Kong on the government’s site on tax allowances.
In addition to the abovementioned allowances, there are other deductions which you may claim on your Hong Kong salaries tax and personal tax assessment. You can normally claim deductions on your income taxes for the following expenses:
- expenses necessary to produce your assessable income (e.g. travel from one place of work to the other)
- donations made to approved charitable organizations
- expenses for self-education (if the class or course, e.g. at one of the universities in Hong Kong, is related to your business or occupation)
- part of your contributions to a mandatory provident fund (MPF) scheme or recognized occupational retirement (ROR) scheme (for details, please check our guide on Hong Kong insurance)
- depreciation (e.g. of plants and machinery), if needed to produce assessable income
- personal losses carried forward from previous years
- interest on home loans in Hong Kong
- expenses for elderly residential care of a parent or grandparent
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Filing Your Tax Return
The year of assessment for doing your taxes in Hong Kong runs from April 1st to March 31st of the following year. Hong Kong’s Inland Revenue Department normally issues the tax return forms (BIR60) for individual taxes on the first working day of May each year. The forms have to be completed on the date specified in the documents. If you do not receive any documents for filing your tax return even though you earn income in Hong Kong, you are obliged to notify the IRD.
When filing your taxes, you have to report all your income from wages and salary as well as profits from self-employment. In your tax return, you should also claim all allowances and deductions you are entitled to. If you are the sole owner of a property, you have to report your rental income on your individual tax return as well. Specific returns for property taxes are issued to joints owners and corporations only.
eTAX is a special service by the Inland Revenue Department, which provides tax-related services and allows you to file your tax return online. This service is available to all residents paying taxes in Hong Kong; it simply requires you to set up an account first.