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Tax Obligations of an Employer in Hong Kong
Keeping payroll records,Your tax obligations commence when you hire the first employee. You must inform the Hong Kong Inland Revenue Department ("HKIRD") the following:any change in the employee's personal particulars (such as change in residential and postal address, change in marital status). Reporting remuneration paid to an employee to the HKIRD
Hong Kong Salaries Tax – Home Loan Interest
Section 26E of the Inland Revenue Ordinance states that the interest paid on loan for purchase of residence is tax deductible. From 2017/18 onwards, the entitlement period for home loan interest is extended from 15 to 20 years of assessment (not necessarily consecutive), while maintaining the current deduction ceiling of $100,000 a year.
Hong Kong Profits Tax – Application for Holding Over of Provisional Profits Tax
Your assessable profits for that year of assessment are, or are likely to be, less than 90% of the assessable profits for the year preceding that year of assessment, or of the sum estimated by the Hong Kong Inland Revenue Department (“HKIRD”) of which you are liable to pay provisional profits tax. Supporting documents including properly signed management accounts covering a period of not less than 8 months
Hong Kong Profits Tax – Introduction
Profits tax is levied under the Inland Revenue Ordinance on the “assessable profits” of corporate entities, partnerships, trusts and sole proprietorships. It is levied according to the “territorial principle” meaning that only those profits which arise in or are derived from Hong Kong are subject to Hong Kong profits tax.
Hong Kong Company Reporting Exemption Guideline Note
For each financial year, the directors of a Hong Kong company must prepare financial statements and the financial statements must be audited. If the company is a holding company, it must prepare consolidated financial statements and include all subsidiary undertakings, including overseas subsidiaries. The generally applicable financial reporting standards are the HKFRS which are modelled after the IFRS.
Tax Incentive of Investment Funds in Hong Kong
The Inland Revenue Department (“IRD”), Hong Kong’s tax authority, issued the Inland Revenue (Profits Tax Exemption for Funds) (Amendment) Ordinance 2019. This new unified tax regime applies from 1 April 2019 and replaces previous tax exemptions separately applied to offshore funds, offshore private equity funds and open-ended fund companies.
Hong Kong Property Tax Introduction
The assessable value is computed by reference to the actual consideration payable to the owner in respect of the right of use of the property. Examples of consideration to be included in the assessable value are rent, payment for the right of use of premises under licence, lump sum premium, services charges and management fee paid to the owner, and owner’s expenditure (e.g. repairs) borne by the tenant.
Characteristics of Hong Kong Property Tax and Rates on Property
Hong Kong property tax is levied annually on the owner(s). If the property is owned by two or more persons, tax assessment will be in the name of joint-owners/co-owners and liability to pay Hong Kong property tax and provisional property tax is joint and several.Rates are tax levied on the occupation of property and are charged at a percentage of the rateable value of the property.
Scope of Charge to Hong Kong Property Tax
Section 5 of the Hong Kong Inland Revenue Ordinance (“IRO”) levies property tax on the property owner in respect of the rental income of his land or buildings or land and buildings in Hong Kong. In general, the tax will be equal to: (Rental income less rates paid by owner and irrecoverable rents) x 80% x Standard rate.
Hong Kong Salaries Tax – Married Person’s Allowance
A married person may claim the married person’s allowance if his / her spouse does not have taxable salary income and has not elected for personal assessment separately for the year. Marriage in the context of the Hong Kong Inland Revenue Ordinance refers to a lawful marriage recognized by Hong Kong law or other legal marriage recognized by the law of the place where it was entered into