Salaries Tax
- Charged on income from Hong Kong
employment or income for services rendered in Hong Kong.
- Visitors performing services in Hong
Kong but staying less than 60 days in a year are exempted.
- Special rules are applied on housing
benefits and share purchase rights.
| Tax deductions (maximum) |
2003/04
(HK$) |
2002/03
(HK$) |
| Self-Education Expenses |
40,000 |
40,000 |
| Home Loan Interest |
100,000 |
150,000 |
| Elderly Residential Care Expenses |
60,000 |
60,000 |
| Contributions to recognised retirement
schemes |
12,000 |
12,000 |
| Personal allowances |
2003/04
(HK$) |
2002/03
(HK$) |
| Single |
104,000 |
108,000 |
| Married |
208,000 |
216,000 |
| Child |
- 1st & 2nd (each) |
30,000 |
30,000 |
| |
- 3rd to 9th (each) |
30,000 |
15,000 |
Dependent parent/grand parent
- basic (each) |
30,000 |
30,000 |
| - additional: residing with taxpayer (each) |
30,000 |
30,000 |
| Single parent |
104,000 |
108,000 |
| Disabled dependent (each) |
60,000 |
60,000 |
| Dependent brother/sister (each) |
30,000 |
30,000 |
| Tax rates (Progressive rates) |
2003/04 |
| First $32,500 |
2% |
| Next $32,500 |
7.5% |
| Next $32,500 |
13% |
| Balance |
18.5% |
| Standard rate |
15.5% |
| Tax rates (Progressive rates) |
2002/03 |
| First $35,000 |
2% |
| Next $35,000 |
7% |
| Next $35,000 |
12% |
| Balance |
17% |
| Standard rate |
15% |
Profits Tax
- Persons, including corporations,
carrying on business are liable to Profits Tax on profits arising in Hong Kong.
| Tax rates |
2003/04 |
2002/03 |
| Corporations |
17.5% |
16% |
| Others |
15.5% |
15% |
- Dividends received are not taxable.
- No withholding tax on divided
payments.
- No capital gain tax in Hong Kong.
- Tax losses may be carried forward
(without time limit) to set-off against the future profit.
Offshore Profits
- Profits from trading activities
outside Hong Kong with only goods handling, banking documentation and bookkeeping done in
Hong Kong are tax exempted.
- Profits from local sales but with
manufacturing outside Hong Kong (eg. in Mainland China) are taxed on half of the profits
only.
Royalties
- Sums receivable from the use in Hong
Kong of a patent, trade mark, design, copyright material, etc, or exhibition or use in
Hong Kong of audio visual recording are generally taxed at 1.6%. Related party dealing may
be taxed at 16%.
- Payers who pay royalties to
non-residents should withhold tax before paying net to the recipient.
Property Tax
- Non-corporate owners of properties
located in Hong Kong are taxed at 15.5% of the rent receivable after a statutory allowance
of 20%.
- Corporate landlords are subject to
Profits Tax.
Interest Income
- Interest income received by
individuals not taxable.
- Non-Hong Kong sourced interest
income received by corporations, partnership and sole proprietor business not taxable (Not
applicable to banks).
- Starting from June 22, 1998, all
interest income derised from deposits placed in Hong Kong authorised institutions is,
subject to certain conditions, exempted from profits tax.
Stamp Duty
- Share transaction: 0.2% on
transaction amount.
- Property transaction: 0.75% - 3.75%
on transaction amount over HK$1 million.
Estate Duty
- Charged on the value of assets
situated in Hong Kong passing on the death of an individual. Principal value of an estate
exceeding HK$7.5 million is taxed at 5% - 15%.
|