The Hong Kong tax law is simple and the taxes low. The tax year begins on 1.4. one year and ends on 31.3. the following year.
When the company has an actual establishment in Hong Kong, e.g. an office (the Registered Office is not enough), it can benefit from the low local taxes of 16.5% and is not subject to any taxation when profits are generated outside. The annual financial statements shall be submitted no later than 9 months after the end of the financial year to the Commercial Register and to the tax authorities (Inland Revenue Department).
The corporate tax rate was lowered for the tax year 2012/13 to 16.5%, this rate shall continue for the tax year 2013/14. The tax rates for the tax year 2013/14 will be determined by the budget to be adopted on 24.2.2013.
The income tax is staggered; the maximum rate from 1.4.2008 is 17%, the average rate of 15%: In the area of income tax, a tax exemption of 100% with a ceiling of HK $ 8,000 per person was arranged for the tax year 2008/09.
Taxes are staggered in Hong Kong very clearly in three main types of taxes: the income tax (salaries tax), the profit tax and property tax.
Taxable under the personal income tax are income and pensions of individuals from employment in Hong Kong. The maximum rate is 15%. However, there are exemptions. For single persons they are HK $ 108,000 and HK $ 216,000 for married couples. By granting free allowances, the maximum rate of 15 per cent applies only, for example, when married couples with two children have an income of HK $ 2,871,000 (approximately U.S. $ 371,000) or more. Normally double-income couples are taxed separately. However, you may be taxed jointly on request.
People who work outside Hong Kong shall be granted a discount on double taxation. Mortgage rates can be reckonable for five years up to HK $ 100,000 per year per property. Thus, Hong Kong is very attractive to foreigners, since even after tax there is generally a lot of money left.
The income tax called profit tax is a kind of capital gains tax and corporation tax on profits of any kind. This tax is applicable to individuals as well as partnerships and corporations, who make a profit commercial and business activities carried out in Hong Kong. The tax rates are 15 per cent for persons and partnerships and 16 per cent for corporations. Machinery and other investments can be written off in the year of acquisition to 60%, followed by a depreciation of 10, 20 or 30 per cent on the remainder. This depends on which category the investment is allocated.
New machines for production purposes and computer (hardware and software) can be written off in the year of acquisition. For new industrial buildings the depreciation rate is 20 percent in the year of acquisition and subsequently four per cent per year. Gains and losses can be transferred without time limitation in subsequent years, for loss however this is valid for the sale of the company.
The "property tax" is a type of property tax on rental income of any kind. It is also at 16%. However, you can be credited up to 20% of the revenue costs. In addition to these three types of taxes, there are also smaller taxes such as a deed tax (Stamp Duty).
Talk to us - We are your partner in Asia