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Tax Information : 2009-10 Budget - Tax Concession and Additional Relief Measures

Tax Concession under Salaries Tax and Personal Assessment
Individuals subject to Profits Tax or Property Tax
Implementation Details of the One-off reduction
Waiver of Business Registration Fees for One Year
FAQs
 


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.

 

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.

 

Implementation Details of the One-off reduction
 
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.

 
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.
     
2.
Businesses are still required to pay the levy for the Protection of Wages on Insolvency Fund.
     
3.
Please refer to the business registration fee & levy table for details of the total amount payable under a certificate.
     
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-
     
  (a)
Businesses holding 3-year certificates with expiry dates on or after 31 July 2010; and
     
  (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.
     
7.
The IRD will announce the application and refund procedures after the Order is passed in the Legislative Council.
     
   
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2003 | Important notices | Privacy policy Last update date: 2 July 2009