Entering March, "tax" has once again become a hot topic.
As one of the three major international financial centers, Hong Kong has its superiority in the tax system, providing a series of tax incentives for Hong Kong and foreign companies and individuals.
01
main tax
According to the "Inland Revenue Ordinance" of Hong Kong, there are three main direct taxes in Hong Kong, namely profits tax, salaries tax and property tax.
① Profits tax: About the personal part
② Salary tax: similar to the company salary income tax in the mainland personal income tax
③ Property tax: similar to the "real estate tax" in the Mainland
02
The following tax regimes are not established
The following 4 tax systems have not been established in Hong Kong, that is, no tax is levied:
① Circulation tax: such as value-added tax, business tax, consumption tax
② Inheritance tax: suspended in February 2006
③ Import and export tax: except for special products such as tobacco and alcohol
④ Capital gains tax: such as dividends, dividends
In addition, Hong Kong adopts the principle of geographical source of taxation (territorial principle), that is, only income earned in Hong Kong must be taxed.
This principle makes Hong Kong an important hub for international companies to expand into the Asian market;
It is easier for companies in Hong Kong to manage their tax obligations.
At the same time, Hong Kong has signed double taxation agreements (DTAs) with more than 50 countries, effectively avoiding double taxation on the overseas income of multinational companies in Hong Kong.
03
8 tax-free items
1
basic allowance
132000
2
married person allowance
264000
3
Child Allowance (1st-9th, by name)
120000
4
dependent sibling allowance
37500
5
Tax allowance for dependents aged 60 and over
(by name)
50000
5
Tax allowance for dependents aged 55 and above (calculated by name)
25000
6
single parent allowance
132000
7
Disabled Persons Allowance
75000
8
Disabled Dependent Allowance
(by name)
75000
04
5 types of deductions
1
personal education expenses
100000 (upper limit)
2
Residential care expenses for the elderly
100000 (upper limit)
3
home loan interest
100000 (upper limit)
4
MPF Contributions
18000 (upper limit)
5
Charity Donation
35%
05
corporate tax rate
Hong Kong's corporate tax rate (ie "profit tax") ranges from 8.25% to 16.5%, which is one of the lowest corporate tax rates in the world.
And this tax rate applies to all companies registered in Hong Kong, regardless of their size or nature of business.
Such a low tax has created a friendly business environment for Hong Kong, attracting a large number of multinational companies to set up companies in Hong Kong.
According to Invest Hong Kong and government statistics:
In 2022, the number of Hong Kong-based companies with parent companies outside Hong Kong will be 8,978, and the number of employees in Hong Kong-based companies will be about 468,000, ranking among the best among countries and regions in the world.
06
personal tax rate
Hong Kong's personal tax is also known as salaries tax, which is taxed according to geographical source, and is only taxed on income generated or derived from Hong Kong.
Salaries tax is taxed in two ways:
① Progressive tax rate 2%-17%;
② The standard tax rate is 15%;
Both take a lower tax amount, which is significantly lower than the top 45% selected by many countries and regions such as the United Kingdom and Germany.
If you work in 9 cities in the Greater Bay Area with a Hong Kong identity, you can enjoy a personal income tax discount of up to 15%.
Nine cities: Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen, Zhaoqing
Hong Kong is an ideal destination for businesses and individuals to develop their business and reduce their tax burden.
Hong Kong is an excellent choice for personal identity planning, asset allocation and corporate development. If you are interested in Hong Kong identity, please contact Xingyunhai International.
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