On 28 February 2024, the Financial Secretary of Hong Kong, Mr. Paul Chan Mo-po, delivered 2024-25 Budget. He proposed to resume the collection of the hotel accommodation tax at a rate of 3% with effect from 1 January 2025. This proposal was passed by the Legislative Council of Hong Kong and published in the Gazette on 25 October 2024.
After the proposal has been enacted into law, the Collector of Stamp Revenue issued the first quarterly hotel accommodation tax (“HAT”) return to the operator of hotels / guesthouses on 2 January 2025. Hotels / guesthouses will need to pay the HAT and file the HAT return for the period from 1 January 2025 to 31 March 2025 on or before 14 April 2025. For the subsequent quarters, the Collector will issue the quarterly HAT returns on the first working day of April, July, October and January in each year.
The manager of that hotel / guesthouse should complete and sign the quarterly HAT return and then send it to the Collector within 14 days after the quarters ending on 31 March, 30 June, 30 September and 31 December in each year, in respect of the three monthly periods ending on those dates.
The normal 10% service charge added to the accommodation charge is exempted from HAT. For example, if the room rate of $1,000 includes 10% service charge and 3% HAT, the HAT is $26.55, which is calculated as: HK$$1,000 / 113% × 3% = HK$26.55.
Kaizen suggests you consult the professional advice of tax advisors before taking actions. Should you have any questions in relation to the proposals, please feel free to contact our CTAs in Hong Kong.
All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.
On 28 February 2024, the Financial Secretary of Hong Kong, Mr. Paul Chan Mo-po, delivered 2024-25 Budget. He proposed to resume the collection of the hotel accommodation tax at a rate of 3% with effect from 1 January 2025. This proposal was passed by the Legislative Council of Hong Kong and published in the Gazette on 25 October 2024.
Hong Kong Taxation System. Property tax is charged on the Hong Kong owners who have derived rental income from letting properties situated in Hong Kong and is computed at the standard rate on the net assessable value of the property.Salaries Tax is imposed on all income arising in or derived from Hong Kong from an office or employment or any pension. “Income arising in or derived from Hong Kong”
Advance Ruling under section 88A of the Hong Kong Inland Revenue Ordinance (“IRO”) is for those who wish to ascertain the tax position of a contemplated transaction or arrangement. A person may apply to the Commissioner of the Hong Kong Inland Revenue Department (“IRD”), subject to the payment of a fee and certain regulations, for a ruling on how any provision of the IRO applies to the arrangement specified in the application.
The Field Audit and Investigation Unit of the Hong Kong Inland Revenue Department (“IRD”) is responsible for conducting tax field audits and investigations on businesses and individuals with a view to fight against possible tax evasion and avoidance.In field audit, IRD officers visit taxpayer’s business premises and examine the accounting records kept by the taxpayer in order to see if the reported profits are correct.
