Features of Hong Kong Taxation System
There are three main categories of tax in Hong Kong. They are Salaries Tax, Profit Tax and Property Tax. Under territorial source concept, those three kinds of income are charged on those part which derived from or arisen in Hong Kong. Hong Kong does not have Capital Gain Tax, Dividend Income Tax, Goods & Services Tax (GST), Vaule Added Tax (VAT).
Current standard rate of Profit Tax for Sole Proprietor or Partnership business is 15% (tax rate for first HK$2,000,000 assessable income is only 7.5%, subjected to certain conditions)
Current standard rate of Profit Tax for Limited Company is 16.5% (tax rate for first HK$2,000,000 assessable income is only 8.25%, subjected to certain conditions )
Current tax rate for Individual on Salaries Tax start from 2% to 17% aggressively (first HK$50,000 subjected to 2%; second HK$50,000 subjected to 6%; third HK$50,000 subjected to 10%; Fourth HK$50,00 subjected to 14%; all reminder salary income subjected to 17%. Standard tax rate for Salaries Tax is 15%)
Get help with your U.S. Taxes
If you are a U.S. citizen and working in Hong Kong as an expatriate, you might be subject to U.S. taxes including but not limited to: U.S. green card /L-1/E-2 /EB-5 VISA holders, Amazon eBay sellers, and U.S. real estate investors. Handling Income Tax Return matters with IRS can be a burden to you. There were big changes for Tax Credits and Deductions during the year 2018. The Tax Cuts and Jobs Act have made big changes to how the government calculates your income taxes. These changes apply to your 2018 federal tax return.Tax Rates Go Down; Standard Deduction Grows; Personal and Dependent Exemptions Are Eliminated. Should you need our assistance in this regard, feel free to contact our tax advisor Martin Chan directly
Tax laws are changing rapidly no matter in Hong Kong and other jurisdictions around the world. How we can handle tax matter smartly and legally? Our tax experts can assist you to identify tax planning opportunities for your personal and corporate level as a whole. With a good planning in advance, you are able to grasp the chance to maximize your tax benefit.
A decisions of the House of Lords on tax avoidance, in IRC v. Duke of Westminster  All ER 259 (H.L.), a principle was established, every person can arrange his affairs lawfully so as to reduce his tax payable.
Albeit such principle makes the foundation for tax planning for individual and corporation, in Hong Kong there are some anti-avoidance provisions in governing such prospect we must be aware.
Section 61 and 61A Inland Revenue Ordinances are typical anti-tax avoidance legislation in Hong Kong
- 61 states that “Where an assessor is of opinion that any transaction which reduces or would reduce the amount of tax payable by any person is artificial or fictitious or that any disposition is not in fact given effect to, he may disregard any such transaction or disposition and the person concerned shall be assessable accordingly.”
- 61A states that “if a transaction would be concluded that the person, or one of the persons, who entered into or carried out the transaction, did so for the sole or dominant purpose of enabling the relevant person, either alone or in conjunction with other persons, to obtain a tax benefit, the assistant commissioner considers appropriate to counteract the tax benefit which would otherwise be obtained.”