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