| Tax Concession under Salaries Tax and
Personal Assessment |
In the 2009-10 Budget delivered
on 25 February 2009, the Financial Secretary proposed a one-off
reduction of 50 % of the 2008-09 final tax in respect of salaries
tax and tax under personal assessment, subject to a ceiling
of $6,000. On 26 May 2009, the Financial Secretary proposed
to increase the one-off reduction for the 2008-09 salaries
tax and tax under personal assessment to 100%, subject to
a revised ceiling of $8,000. See Implementation
Details of the One-off reduction for details.
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| Individuals subject to Profits Tax or
Property Tax |
Individuals having business
profits or rental income, if eligible,
can enjoy the reduction by electing personal assessment. Under
personal assessment, they will enjoy a reduction of 100% of
the 2008-09 final tax, subject to a ceiling of $8,000 per
case.
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Implementation Details of the One-off reduction
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| Under
salaries tax, the ceiling of $8,000 per case is applied on
individual taxpayer basis. For couples electing to be jointly
assessed, the ceiling is applied on each couple. Under personal
assessment, single taxpayers will each be subject to the ceiling.
Married couples must make their personal assessment election
together and the ceiling will therefore apply to each couple.
Please refer to the example in Annex
1 for typical cases showing tax savings of taxpayers
liable to salaries tax when the one-off reduction in 2008-09
final tax is implemented. You can also use our tax
computation program to calculate your tax liability
under salaries tax or personal assessment under the 2009-10
Budget proposal.
The tax reduction will be reflected in the
tax bill in 2009-10. Taxpayers will, as usual, file their
tax returns - individuals for 2008-09 which will be issued
starting from May 2009. They need not make any application
on the reduction.
Legislative amendment is required for implementing
the relief measure proposed in the Budget. Upon enactment
of the relevant legislation, the Inland Revenue Department
will effect the reduction in the final assessment for 2008-09.
Most taxpayers will receive their tax bills, with the reduction
duly reflected, starting from the third quarter in 2009. As
in previous years, salaries tax will generally fall due in
January 2010.
The proposed one-off reduction will only apply to the 2008-09
final tax, but not to the provisional tax of the same year.
For most taxpayers, the second instalment of their 2008-09
provisional tax will fall due in April 2009, which should
be paid on time despite the proposed reduction. The provisional
tax paid will, in accordance with the Inland Revenue Ordinance,
be applied in payment of the final tax for 2008-09 and provisional
tax for 2009-10. Excess balance, if any, will be refunded.
Individuals having business profits or rental income, if eligible,
can enjoy the reduction by electing personal assessment. They
can make the election when completing their 2008-09 tax returns.
The Department will check in each case if the personal assessment
election will reduce the amount of tax payable, and assess
each taxpayer in the way most advantageous to him.
Individuals having salaries income only, but no rental income
or business profits, are not required to elect personal assessment.
Tax bills issued before enactment of the relevant legislation
will not reflect the tax reduction. The Inland Revenue Department
will revise them after the enactment. Excess tax paid will
be refunded from late July onwards. Taxpayers are not required
to apply for such refund or make phone enquiry in this regard.
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Waiver
of Business Registration Fees for One Year |
(from
1 August 2009 to 31 July 2010) |
As
part of the special relief measures announced by the Financial
Secretary on 26 May 2009, business registration fees will
be waived for one year. The Revenue (Reduction of Business
Registration Fees) Order 2009 (¡§the Order¡¨), which seeks to
implement the proposal, will be gazetted on 26 June 2009.
Subject to the approval of the Legislative Council, the waiver
of business registration fees will take effect from 1 August
2009. |
Waiver
of Business Registration Fees |
| 1. |
By
the Order, the fees payable in respect of business registration
certificates and branch registration certificates with commencement
date falling within the period from 1 August 2009 to 31 July
2010 (¡§waiver period¡¨) will be reduced by a sum of $2,000
and $73 respectively.
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| 2. |
Businesses
are still required to pay the levy for the Protection of Wages
on Insolvency Fund. |
| 3. |
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| 4. |
The
waiver does not apply to new or renewal business registration
certificates and branch certificates that have a commencement
date before 1 August 2009. Hence, business operators who received
such demand notes from the Business Registration Office have
to settle the amounts demanded when due. These businesses
will enjoy the waiver when their business and branch registrations
are renewed during the waiver period. |
Concessionary
Refund of Registration Fee Paid |
| 5. |
The
Order only waives one-year registration fees for new certificate
or renewal certificate with commencement date falling within
the waiver period. It does not provide for the refund of fees
paid in respect of the waiver period. |
| 6. |
In
order that the waiver can also benefit those businesses that
have paid the registration fees for the waiver period but
are not required to renew their certificates in the period,
concessionary refunds of the relevant amount of business registration
fees paid for the waiver period will be allowed to them, upon
their applications. They include the following types of businesses- |
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(a) |
Businesses
holding 3-year certificates with expiry dates on or after
31 July 2010; and
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| |
(b) |
Businesses
whose registration certificates expire between 1 August 2009
and 31 July 2010 but they are not required to renew their
registration certificates because of cessation of business.
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| 7. |
The
IRD will announce the application and refund procedures after
the Order is passed in the Legislative Council. |
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