Holiday journey benefits granted by employers are assessable under Section 9(2A)(c) of Hong Kong Inland Revenue Ordinance.
The assessable amount is the actual cost incurred by the employer in providing the benefit to the employee and / or his family members.
The Ordinance provides that the charge of tax is irrespective of the following factors: (1) Whether or not the benefit is convertible into cash; (2) Whether the primary liability for the benefit is the employee’s own; (3) Whether or not the benefit will add additional cost to the employer.
The payment for the relocation of an employee and his family to Hong Kong on commencement of employment or for the relocation of an employee out of Hong Kong is not taxable.
To put it simply, the amount taxable is the amount paid by the employer in connection with the benefit. This includes the cost of the air tickets, hotel accommodation, traveling, food, package-tour fee, etc.
Only “holiday journey” benefits are taxable. All expenses in connection of business journey are exempt. Business journey means the employees travelling is required by his employer to perform his duties. If a trip is substantially for business purpose, even though part of the trip is for non-business purpose, the whole journey will be exempt. However, if the non-business portion is significant and can be clearly identified, the expenses attributable to the non-business portion will be ascertained and taxable.
Source:Hong Kong Inland Revenue Department’s website
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If the source of employment is located in Hong Kong, an employee’s any income derived from that employment falls within the basic charge to Salaries Tax, except in the basis period of a year of assessment render all his/her services outside Hong Kong, or services rendered during his/her visit to Hong Kong not exceeding a total of 60 days in the basis period of a year of assessment.
According to Section 8(1) of the Hong Kong Inland Revenue Ordinance, salaries tax is imposed on all income arising in or derived from Hong Kong from an office, employment or any pension.In addition, regarding a non-Hong Kong employment, salaries tax is imposed by Section 8(1A) of the Hong Kong Inland Revenue Ordinance to assess income derived from services actually rendered in Hong Kong.
If you are liable to tax in Hong Kong, you have to inform the Inland Revenue Department (“IRD”). Section 51(2) of the Inland Revenue Ordinance (“IRO”) provides that a person chargeable to tax for any year of assessment shall inform Commissioner in writing that he/she is so chargeable not later than 4 months after the end of the basis period for that year of assessment unless he/she has already been required to furnish a tax return.
As a Hong Kong taxpayer, you may claim child allowance if, during a year of assessment, you maintain an unmarried child who was below 18, or if 18 to 25: a full-time student, or if over 18: disable for work. No double claim of child allowance for a child. No sharing or splitting of child allowance among a couple unless the couple is living apart or divorced.