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Hong Kong tax - Basic information on profits tax, salaries tax, property tax and stamp duty
Below are some of the basic information that provide a glance on the Hong Kong tax structure. In fact Hong Kong has a simple tax structure, low tax rate and efficient tax administration system. More importantly, Hong Kong has a well established legal system and freely exchanged currency. These elements enable many multinationals doing business in China to set up regional offices in Hong Kong.
Hong Kong Profits Tax
Profits tax is chargeable on a person who carries on a trade, a business or a profession in Hong Kong and has a Hong Kong source income derived from such trade or business. A person includes a sole-proprietorship, a partnership, a corporation, a trustee or a body of person.
The profits tax rates are:
| Legal Form |
2007/08 |
2008/09 |
Sole Proprietorship | 16.0% | 15.0% |
Partnership | 16.0% | 15.0% |
Corporate | 17.5% | 16.5% |
Hong Kong Salaries Tax
Salaries tax is chargeable on an individual who has income derived from a Hong Kong source employment, office or pension. Income received from a Hong Kong source employment if generally fully taxable in Hong Kong unless a person performs all services outside Hong Kong or a non-resident visits Hong Kong for 60 days or less in a year of assessment (from April 1 to the following March 31).
For income received from a non-Hong Kong source employment (employer is a non-residence company). Tax is payable on a time appointment basis based on the number of days stayed in Hong Kong during the year of assessment.
The progressive salaries tax rates are:
|
2007/08 |
|
2008/09 |
First $35,000 | 2% | First $40,000 | 2% |
First $35,000 | 7% | First $40,000 | 7% |
First $35,000 | 12% | First $40,000 | 12% |
Reminder | 17% | Reminder | 17% |
Personal Allowances are:
|
2007/08 |
2008/09 |
| Basic allowance | $100,000 | $108,000 |
| Married persons allowance | $100,000 | $108,000 |
| Child allowance (max 9 children) | $50,000 | $50,000 |
| Additional child allowance for new born baby | $50,000 | $50,000 |
| Dependent parent allowance (age>60 or disability) | $30,000 | $30,000 |
| Dependent parent allowance (age 55-59) | $15,000 | $15,000 |
| Additional dependent parent allowance (age>60 or disability) | $30,000 | $30,000 |
| Additional dependent parent allowance (age 55-59) | $15,000 | $15,000 |
| Dependent grandparent allowance (age>60 or disability) | $30,000 | $30,000 |
| Dependent grandparent allowance (age 55-59) | $15,000 | $15,000 |
| Additional dependent grandparent allowance (age>60 or disability) | $30,000 | $30,000 |
| Additional dependent grandparent allowance (age 55-59) | $15,000 | $15,000 |
| Dependent brother/sister allowance | $30,000 | $30,000 |
| Disable dependent allowance | $60,000 | $60,000 |
| Single parent allowance | $100,000 | $108,000 |
Hong Kong Property Tax
Property tax is chargeable on an individual who has income accrued from an immovable property situated in Hong Kong. Property income accrued to a corporation is usually treated as part of the income derived from its business and it is normally charged to profits tax.
The standard property tax rates are:
|
2007/08 |
2008/09 |
Standard tax rate | 16.0% | 15.0% |
Hong Kong Stamp Duty
Stamp duty is chargeable on the following documents:
-
Purchase, sale or gift of an immovable property situated in Hong Kong
-
Lease of an immovable property situated in Hong Kong
-
Purchase, sale or gift of Hong Kong stock
Stamp duty rates for sale, purchase or gift of an immovable property:
| Higher of consideration or market value |
Stamp duty rates |
| Up to Feb 27, 2007 |
From Feb 28, 2007 |
| Less than $1M | $100 | $100 |
| $1M - $2M | 0.75% | $100 |
| $2M - $3M | 1.50% | 1.50% |
| $3M - $4M | 2.25% | 2.25% |
| $4M - $6M | 3.00% | 3.00% |
| Over $6M | 3.75% | 3.75% |
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