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What are my tax obligations |
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You
are chargeable to Salaries Tax on your income arising in or
derived from Hong Kong from an office or employment or any pension.
You need to: |
| (a) |
Complete and submit your Tax Return - Individuals (BIR60) to report your income; |
| (b) |
Notify liability to tax (see Notification of Chargeability
for time limit and other details) unless you have already received the tax return from us; |
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(c) |
Notify departure from Hong Kong 1 month prior to departure; |
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(d) |
Notify change of address within 1 month of change; and |
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(e) |
Pay the tax. |
| Note: |
(1) If you work for yourself and are not employed
as an employee, you are considered as a Self-Employed
and are chargeable to Profits Tax on your income. |
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(2) If you receive a tax return from us, you
must complete and submit it in time even if you do not have
any income chargeable to Salaries Tax. |
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How Salaries Tax is computed |
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| 1. |
Salaries
Tax is chargeable on the smaller of your net chargeable income
at progressive rates
and your net income at standard
rate for each year of assessment. |
- Net Chargeable Income = Total Income - Deductions - Allowances
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- Net Income = Total Income - Deductions
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| 2. |
A year of assessment runs from 1 April to 31 March of the following year.
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| 3. |
Provisional Salaries Tax for a year is usually based on the income less the allowances of the preceding year.
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| 4. |
You
may use our Tax
Computation Program to calculate your own Salaries Tax
liability. |
Are husband and wife assessed separately or jointly |
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| Husband and wife are treated as separate individuals and they are
assessed separately under Salaries Tax.
If the earnings of one spouse are less than
his/her tax allowance, the husband and wife would be advantageous
to elect for joint assessment. Their income and allowances
will be aggregated, and married person's allowance will be
deducted from joint total income. Obviously, this will result
in some savings in tax for the couple.
Hence, where it appears that a joint tax bill may be smaller than your two tax bills added together, you and your spouse should make an election for joint assessment in your tax returns (in Part 4.4 of B.I.R. 60 and Part 9 must be signed by both you and your spouse). If joint assessment does not result in less tax, the Assessor will issue separate tax bills instead. Please note that there is a time limit for election/withdrawal. Once you withdraw your election, re-election for the same year of assessment will not be entertained.
If your spouse does not have any income chargeable to Salaries Tax, you will be entitled to claim
Married Person's Allowance and there is no need for you and your spouse to elect joint assessment.
For further information, see
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Which income is assessable |
| 1. |
Assessable
income includes: |
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(a) |
Salaries / wages, director's fees
These should be the gross amount before deducting the employee's
contributions to a recognized occupational retirement scheme
or a mandatory provident fund scheme. |
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(b) |
Commission (include "Dim Yung"), bonus, leave
pay, end-of-contract gratuities
Generally speaking,
with the exception of a handful of exempt items (e.g. payments
in lieu of notice of termination of employment, compensation
for injuries, payments specically exempted under the Inland
Revenue Ordinance), almost all payments made by the employer
to the employee are taxable, regardless of whether the amount
was paid according to or in excess of the terms of employment,
and whether the amount was paid pre-commencement, post-cessation
or during the course of employment. |
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(c) |
Allowances, perquisites or fringe benefits
These include cash allowances, liability of employee
discharged by employer, convertible benefits, education benefits,
holiday journey benefits. For further information, see |
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(d) |
Tips from any person
For example,
tips paid by the customers to the waiters of a restaurant,
tour guide tips. |
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(e) |
Salary tax paid by employer |
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(f) |
Value of a place of residence
This value is normally computed as 10% of your income from
the employer after deduction of outgoings and expenses (but
not self-education expenses). For further information, see
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(g) |
Share options and share awards
See |
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(h) |
Back pay, contract gratuities, deferred
pay and arrears of pay (including relate back)
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(i) |
Termination payments and retirement benefits
See |
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(j) |
Pensions |
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| 2. |
Also
see
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Which income is not chargeable
You are not required to report the following income in your tax return:
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| 1. |
Payment in lieu of notice |
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| 2. |
Jury fees
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| 3. |
Severance payments and long service payments Severance Payments / Long Service Payments that are required to be paid under the Employment Ordinance are not assessable to Salaries Tax. If you have been paid gratuities or retirement benefits, the severance payment / long service payment to be paid under the Employment Ordinance is to be reduced by the aforesaid amounts. You should only exclude the reduced amount. Exemption will not be extended to that part of the gratuities and retirement benefits used to offset the severance payment / long service payment. The whole amount of gratuities and retirement benefits should be reported in the usual manner. For details, see About Termination Payments.
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How to retain supporting documents to substantiate my
deduction claim |
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| Do not attach any documentary evidence to your Tax Return - Individuals (B.I.R. 60).
To substantiate your deduction claim and for ascertainment of the proper amount deductible,
you have to retain relevant documentary evidence for 7 years.
Upon request, you have to present them to the Assessor for
inspection. |
What should I do if I disagree
with the tax assessment or wish to apply for hold over of
provisional tax |
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| See
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Related Information and Pamphlets |
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