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The tax system in Hong Kong

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On moving to Hong Kong, you will probably have queries regarding taxation. While there are a lot of rumours that you can work in Hong Kong tax-free, this is not the case. If you have a long-term visa in Hong Kong, you will be required to pay Hong Kong income tax.

The rates for income taxation in the region are notably low, you are likely to pay individual income tax at a rate of 15% (tax in Hong Kong is progressive, the more you earn the more you pay — however, you will not pay more than 17%) and tax on profits at a rate of 16,5% if you have set up a business there. Hong Kong also has agreements with several countries in order for its foreign residents to avoid double taxation. Note that the different types of taxes applied are not deducted at source.

The tax system is managed by the Hong Kong Inland Revenue Department. The tax year starts on the 1st of April to end on the 31th of March of the following year.

Tax system for different profiles

Income tax applies to all persons receiving revenue in Hong Kong, namely employees, retirees, auto-entrepreneurs, etc. Your salary tax will make up the largest part of the income tax together with bonuses, commissions, etc. Learn more about salary tax and how it is calculated here.

Other types of incomes taxable in Hong Kong are the income from renting out property in Hong Kong and self-employment income.

Tax return

Employees receiving taxable income generally receive a tax return BIR60 form (Tax Return – Individuals). Companies, for their part, receive the BIR51 form while auto-entrepreneurs receive the BIR52 form. Non-residents receiving income or benefits in Hong Kong have to fill the BIR54 form. Finally, individuals and companies owning a real estate property in Hong Kong have to fill the BIR57 and BIR58 forms respectively. These forms have to be duly filled and signed and sent to the Inland Revenue Department (IRD). Thereafter, income tax has to be paid before the deadline indicated on the tax assessment issued by the IRD.

If you are going to pay tax for the first time (in the case of a first job, first tax ceiling reached, benefits, annuities, etc.), you are required to inform the IRD within four months following the end of the tax year. You will then have to fill an IR6167 income tax form, or an IR6168 form for tax on benefits, or an IR6129 form for property tax. The following documents have to be produced:

  • a handwritten letter
  • your identity card or passport number
  • your records number
  • your postal address
  • your phone number (mentioning time schedules when you can be contacted).

 Important:

In case you have not received any document, you are required to notify the IRD that you are not taxable.

Paying tax

There are various ways to pay tax in Hong Kong.

Firstly, you can pay by phone, online or at an ATM. However, you will require a TRC Account Number, which you can request from the TRC Section by filling an IR1306 form. Note that you must be in possession of a tax assessment to be able to use this payment mode. The Shroff Account Number for electronic payments, which is an 11-digit number (containing dashes and letters), is printed on this document. The first numbers have to be deleted as you get started. In case of payment by phone or at the ATM, the “A” has to be deleted. Finally, in the case of online payment, some banks will require the “A” while others will not.

If you prefer to make payment by post, you can send a cheque to the Government of the Hong Kong Special Administrative Region or to the Government of the HKSAR. You are required to write the Shroff Account Number on the back of the cheque and to follow instructions given in the tax notice. You can then send the letter to the Commissioner of Inland Revenue, P.O. Box 29015, Gloucester Road Post Office, Hong Kong.

On the spot payment is also accepted at regular post offices (except at mobile post offices). You can then pay either in cash or by check. Note that payment can also be made at the Revenue Tower in Wan Chai and at Gloucester Road post office.

Finally, you can send a crossed-check to the address mentioned below if you have a bank account in Hong Kong. You are required to write your reference number, as well as the Shroff Account Number on the back, along with an acknowledgment of payment which you will send to the Commissioner of Inland Revenue, P.O. Box 28282, Gloucester Road Post Office, Hong Kong.

In case you do not have a bank account in Hong Kong, you might as well sent a HKD check or a foreign currency crossed-check in the same order as indicated above and at the same address. However, a foreign currency crossed-check has to bear your tax number and the Shroff Account Number.

 Important:

Given the variations of exchange rates, you are advised to pay a lightly higher amount that what is mentioned in the tax assessment sent by the IRD. Any excess will be refunded via a HKD cheque.

 Useful links:

Inland Revenue Department – Department of local taxes
Inland Revenue Department – Tax Guide
Inland Revenue Department – Individual income tax guide
Inland Revenue Department – Property tax
Inland Revenue Department – Tax on profits
Indland Revenue Department – Individual income tax
Indland Revenue Department – Corporate tax
Indland Revenue Department – Employers tax
IR6167 form – Registration as an individual taxpayer
IR6167 form – Registration as an entrepreneur
IR6167 form – Registration as an owner
IR1306 form – Application for a TRC Account Number

We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.
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