Taxation Service

Tax planning is important as it enables company to save money for business development and expansion.  Our professionals provide consulting advice to both companies and individuals to efficiently plan their corporate tax and personal tax respectively.  Our tax services include:-

Advice on profits tax for companies

Advice on tax planning for sole traders, partnerships and individuals

Advice on estate and stamp duty planning

Assistance in handling inquiries from the Hong Kong Inland Revenue Department

Representation of clients in tax objections and appeals

 

 

 

 

Hong Kong Taxes Summary¡@ ¡@ ¡@ ¡@
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SALARIES TAX¡@ ¡@ ¡@ ¡@
  • Salaries tax is charged on every person in respect of his income arising in, or derived from Hong Kong from an office, employment# and any pension.
  • Income where services are performed in Hong Kong during visits not exceeding 60 days are exempted.
  • Special rules are applied on housing benefits, holiday allowance and share purchase rights.

# Difference between an office and employment:
(i) An office is a subsisting, permanent, substantive position, which has an existence independent of the person who fills it and which goes on and is filled in succession by successive holders. Company director and company secretary are examples of offices. Company director and company secretary are examples of offices.

(ii) In the case of employment, a master and servant relationship exists. Sales representative and accounting officer are examples of employments. The 60-day rule only applies to an employment.

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Perosnal Allowances ¡@ ¡@ ¡@
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1997/98

1998/99 onwards

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(HK$)
(HK$)
Basic Allowance¡@
100,000
108,000
Married Person's Allowance
200,000
216,000
Child Allowance ¡@
¡@
¡@
¡@ 1st
27,000
30,000
¡@ 2nd
27,000
30,000
¡@ 3rd
14,000
15,000
¡@ 4th-6th (each)
14,000
15,000
¡@ 7th-9th (each)
14,000
15,000
Dependent Parent/Grandparent Allowance (each)
¡@ Basic
27,000
30,000
¡@ Additional (resident with taxpayer)
8,000
30,000
Single Parent ¡@
75,000
108,000
Disabled Dependent
25,000
60,000
Dependent Brother/Sister (each)
27,000
30,000
Additional Tax Deductions (maximum)
¡@
¡@
¡@ * Fee for training courses
20,000
30,000
¡@ * Mortgage interest by owner occupiers - each year (for 5 years)
-
100,000
¡@ * Expenses of a dependent parent/grand-parent in residential care
-
60,000
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Tax Rates ¡@ ¡@ ¡@ ¡@
Progressive Tax Rates
¡@1998/99 onwards
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1st $35,000¡@
¡@2%
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2nd $35,000¡@
¡@7%
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3rd $35,000¡@
¡@12%
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Remainder ¡@
¡@17%
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Standard Tax Rate¡@
¡@ 15%
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PROFITS TAX

  • Profits tax is charged on every person from carrying on a trade, profession or business in Hong Kong in respect of his assessable profits arising in or derived from Hong Kong from such trade, profession or business. "Person" includes a corporation, partnership, trustee and body of persons.
  • Profits from trading activities outside Hong Kong with only goods handling, banking documentation and bookkeeping done in Hong Kong are tax exempted.
  • Profits arising from the sale of capital assets are excluded from the charge
  • Dividend received are not taxable
  • No withholding tax on dividend payments
  • Interest income
    • Interest income of an individual is not taxable
    • Interest income of a corporation, sole trader and partnership not arising in or derived from Hong Kong is not taxable (except financial institutes)
    • With effect from 22 June 1998, interest income from bank deposits is not taxable if certain conditions are fulfilled (except financial institutes)
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Standard Tax Rate
¡@1998/99 onwards ¡@
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- Corporation
¡@16%
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- Other persons
¡@15%
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PROPERTY TAX¡@ ¡@ ¡@ ¡@
Property tax is computed at the standard rate (15%) on the net assessable value of land and/or buildings for the year of assessment. Net assessable value is arrived after deduction of 20% statutory deduction from the consideration payable in the that year. Actual expenses on repairs and maintenance cannot be deducted.
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Corporations are exempted from property tax and the profits derived from the property will be included in profits tax calculation.

 

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STAMP DUTY¡@ ¡@ ¡@ ¡@
Rates of stamp duty on sale or purchase of Hong Kong stock is 0.225%, and 0.25% for 1999/2000.
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Rates of charge for transfer of immovable property is from 0.75% to 3.75%.
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ESTATE DUTY¡@ ¡@ ¡@ ¡@
Estate duty is payable upon the principal value of property situated in Hong Kong which passes or is deemed to be death of an individual to another person. Only estate value over HK$7.5 million is chargeable, the rate of charge is from 5% to 15%.

 

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