Tax season is here. In Hong Kong, salary taxes must be filed before May 31st. As a foreigner, you might be wondering how to file a tax return and what the regulations are. Luckily Hong Kong has made it easy by creating an online tax filing system that you can complete from your computer or phone. Let us answer some common questions about tax filing that might come up:
Preface: The following is Q+A for tax year 2023 only, based on information provided on Hong Kong's Government Website for your reference only. Personal income tax can be a complicated issue; for specific answers regarding your tax situation please contact the Hong Kong tax helpdesk at (852) 183 5500 or email to [email protected]. The ultimate decision for tax payable is up to the discretion of the Hong Kong tax office
Q: When should I file taxes?
A: Before May 31st (tax year is from April 1st to March 31st similar to the UK). Q: When are Hong Kong salary tax payments due? A: Tax payments are due by June 2nd, after which there will be penalties for late payments. Q: What makes me eligible for paying Hong Kong taxes (or what makes me a tax resident)? A: You become liable for paying taxes in Hong Kong if you earn income from Hong Kong. Hong Kong taxes on a territorial basis, so tax residency is not a factor. Q: What is the income tax rate?/ How much is Hong Kong's income tax rate? A: The income tax rate for ranges from 2% to 17% depending on the income amount. See the table below for details. Hong Kong 2023 (April 2023 - March 2024) Progressive Salary Tax Rate Table:
In other words, the progressive rates are as follows:
Q: Are there tax exemptions? A: Yes, there is a fixed deduction of HKD 5,000 per month for non-tax residents and a fixed deduction of 60,000 HKD per year for tax residents. Q: Are there tax deductions? A: Yes, there are tax deductions available for the taxpayer, dependent children and parents, disabled family members, and other dependents. See the list below (HKD):
Q: What non-taxable fringe benefits can employers give to employees? A: The Inland Revenue Ordinance outlines the tax treatment for four specified benefits in kind, which include housing, holiday journey benefits, child education, and stock options. Q: How do I compute tax in Hong Kong?/ How do I compute a tax refund in Hong Kong?/ How do I calculate income tax in Hong Kong? A: Take your gross net salary and subtract the standard deduction.. After this, you can see which tax bracket your wage falls into, and you can subtract the progressive difference. Multiply this by the rate of the tax bracket and you will arrive at the amount of tax owed. Alternatively, if you file taxes online, the computer will compute your taxes for you. For example: Let's say the gross salary for me is 1,200,000 HKD. I subtract the personal allowance (1,200,000-132,00=1,068,000). This amount falls under the 17% tax bracket (see table above), so after I multiply this amount by the tax rates above I get 163,560 HKD. Gross Salary 1,200,000 HKD -132,000 = 1,068,000 x 17% at progressive rate = 163,560 = 163,560 HKD total tax due If your tax is lower by multiplying 15% to your comprehensive income, then you can choose to use 15%. Q: Is there an online tax calculator I can use? A: Yes, you can use the free online calculator from Conpak here (should only be used for reference): https://www.conpak.com/app/hk-iit.html Q: How do I file taxes in Hong Kong? A: If you are a tax resident you can e-file or go to the tax office in person. You go in person, the word on the street is that it takes less than 20 minutes to file. You can also e-file, and save yourself a trip outdoors. Click here to download the e-filing system for foreigners: https://www.gov.hk/en/residents/taxes/taxfiling/index.htm When you file with your passport number, use your latest passport, even if the year you are filing for was before you got your new passport. Q: How do I pay my taxes? A: You can pay by telephone, Internet, or bank Automated Teller Machine (ATM). Q: How do I get my tax refund? A: You can get your refund by check or direct deposit. The later you send your documents the later you get your refund. Q: When will I get my Hong Kong tax refund? A: No one can say for sure. This depends on how early you submitted your tax refund, how complicated your refund is, and the arbitrary decision-making of the tax officer assigned to you. As an example, I personally filed my taxes the first week of May and received my tax refund in July. If you really want to know the timing of your tax refund, call the Hong Kong tax helpdesk at (852) 183 5500 or email to [email protected]. Now, stop asking this question in the comments! Q: What is the withholding tax rate in Hong Kong? A: There is no salary withholding tax in Hong Kong. Q: What is the withholding tax rate on dividends for foreigners in Hong Kong? A: There is no withholding tax on interest and dividends. Q: What is the tax rate on overseas income for foreigners in Hong Kong? A: There is no tax on overseas income. Q: What is the sales tax/VAT/indirect tax rate in Hong Kong? A: 0%, there is no VAT in Hong Kong. Q: What is the hotel tax rate in Hong Kong? A: 0%, there is no VAT in Hong Kong. Looking for a hotel in Hong Kong? You can search for the best hotel deals in Hong Kong here. You can also book Wifi and SIM cards for Hong Kong on Gigago here. Q: What is the corporate income tax rate in Hong Kong? A: 16.5% Q: How do I file US Taxes if I am an American citizen or a green card holder overseas? A: Please see our guide on filing taxes as an American Expat living overseas here. Q: Who Should I go to if I have a question while filing my income tax return on my own? A: For specific questions, please call the Hong Kong tax helpdesk at (852) 183 5500 or email to [email protected]. You can check out many discount deals for accommodation, tours, shopping, and transportation for foreigners in Hong Kong on Klook here or on KKday here. Feel free to comment or ask any reasonable general questions below that a free online blog can answer (otherwise, please just call the tax office), and please like and share! -Larry
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