Under Section 8(1) of the Hong Kong Inland Revenue Ordinance (“HK IRO”), pension arising in Hong Kong is chargeable to salaries tax.
No definition of “pension” is made in HK IRO. Generally, pension refers to an annuity or other recurring periodic payments for consideration of past services.
Section 9(3) of HK IRO extends the charge to cover a pension which is voluntary or is capable of being discontinued.
Like employment income, only the pension arising in or derived from Hong Kong is assessable. This follows that we have to determine the location of the source of the pension. From Hong Kong Inland Revenue Department’s view, the place where the pension is managed and controlled is the decisive factor in determining the source of the pension.
Generally, that means the place of the business that employed the pensioner. But in some special cases, it can be located at the place where the trustee has power to control the fund.
In computing the income of a taxpayer, his pension attributable to services rendered in any office or employment but not attributable to services rendered in Hong Kong shall be excluded (other than employment by the Government).
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.