Account & Taxation
Hong Kong is adopting the low and simple tax system, where has attracted many local and foreign enterprises to develop their businesses.
There are only three types of Direct tax levied in Hong Kong, which are Profit tax, Salaries tax and Property tax, while others common indirect taxes such as Value-added tax (VAT), Sales tax and Estate Duty are not imposed.
Whether you are an individual and a business, Auditing and Tax return is a dauting and unforgiving time. Most taxpayers always prolong due to irritating procedures and end up with a penalty.
In fact, if you appoint the appropriate and professional advisor in time, everything will become easier and simple. Also, you will not only avoid the troublesome taxation or delayed penalty, but also received the professional advice which avoid overpaying tax.
It is not rare that staff salaries are one of the major expenses for SMEs in Hong Kong.
In Hong Kong, it is easily costing over HK$10,000 a month for hiring a slightly experienced bookkeeper to handle tax matters. If you need assistance from a CPA firm, it may cost even higher. But now, you have another option. With our rich experience in dealing with accounting and taxation issues, we could provide the best solutions for you.
Focus on developing your business, just let us to handle it!
Our Service
Book-keeping & stock taking
Preparing financial statements
Preparing tax computation schedule
Filing tax returns
Replying letters from IRD
Focus on developing your business, just let us to handle it!
It is not rare that staff salaries are one of the major expenses for SMEs in Hong Kong. In Hong Kong, it is easily costing over HK$10,000 a month for hiring a slightly experienced bookkeeper to handle tax matters. If you need assistance from a CPA firm, it may cost even higher. But now, you have another option. With our rich experience in dealing with accounting and taxation issues, we could provide the best solutions for you.
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(852) 2159 8001
About Hong Kong Taxation （Direct Tax）
Profits Tax
At present, Profit Tax can be calculated at the Standard tax rate and Two-tiered tax rate.
Standard Tax Rate
The standard tax rate of 16.5% and 15% are applied to the assessable profits of Corporations (E.g., Limited Company) and sole proprietorships or partnerships respectively. Generally, tax reduction is allowed for outgoings and expenses arising from carrying on of a business such as rental fee, employees’ salaries, the contribution of Mandatory Provident Fund scheme (only eligible for unincorporated businesses), and interests on borrowings.
Two-tier Tax Rate
Starting in 2018/19, the Inland Revenue Department (IRD) has added a two-tier tax rate to benefit SMEs. The tax rate for the first HK$2 million profit of the corporation’s business is 8.25%, and subsequent profits are taxed at the standard rate of 16.5%; for sole proprietorships or partnerships, the tax rate is 7.5% on the first HK$2 million in profits, and subsequent profits are taxed at the standard tax rate of 15%.
However, for two or more connected entities, only one of them may elect the two-tiered profits tax rates. For further details on the definition of connected entities and the two-tiered profits tax system, please call our professional advisors at 2159 8001 to avoid misreporting or underreporting.
Salaries Tax
If you received an Individual Tax Return (BIR60), you must declare to IRD for income declaration even if there is without chargeable income.
Presently, Salaries Tax can be calculated at the Standard rate and Progressive rates.
Standard rate
is calculated at 15% of net income.
累進稅率
known as marginal tax rate, are payable at different tax bands and are detailed in the chart below,
|
Tax Brands Net chargeable income (HKD) |
Rate |
|---|---|
|
On the First 50,000 |
2% |
|
On the Next 50,000 |
6% |
|
On the Next 50,000 |
10% |
|
On the Next 50,000 |
14% |
|
Remainder |
17% |
Tax rate of the assessment year 2020/21
Common Deductions Allowable
Taxpayers may claim deductions for:
- Approved Charitable Donations
- Contributions to a MPF Scheme or Recognized Occupational Retirement Scheme
- Expenses of Self-education
- Outgoings and expenses that are wholly, exclusively and necessarily incurred in the production of the assessable income
Tax Allowance
In every year of assessment, each person is entitled to a basic allowance unless you are married and have been granted the married person’s allowance. You do not have to lodge a claim for this allowance. Other allowances also include:
- Child Allowance
- Dependent Parent and Dependent Grandparent Allowance
- Dependent Brother or Dependent Sister Allowance
- Single Parent Allowance
- Disabled Dependant Allowance
- Personal Disability Allowance
*Please refer to GovHK website for further details on allowance*
The Financial Secretary proposed a one-off reduction of salaries tax and tax under personal assessment for the year of assessment 2023/24 by 100%, subject to a ceiling of $3,000 per case.
(1) The Government has proposed that a 100% reduction in salaries tax and tax under personal assessment for the year of assessment 2020/21, subject to a ceiling of HKD10,000. (To be implemented upon approved of the IRD Ordinance)
(2) 2022/23年度利得税税款的100%可獲寬減，每宗個案以6,000元為上限。
(3) 2021/22年度利得税税款的100%可獲寬減，每宗個案以10,000元為上限。
(4) 2020/21年度利得税税款的100%可獲寬減，每宗個案以10,000元為上限。
(5) 2019/20年度利得税税款的100%可獲寬減，每宗個案以20,000元為上限。
(6) 2018/19年度利得税税款的100%可獲寬減，每宗個案以20,000元為上限。
Property Tax
Standard rate
Property Tax is calculated on the net assessable value (i.e. net rental income) for the year of assessment at the standard rate of 15%.
It is defined as Rental Income less irrecoverable rent, rates paid by owner and repairs.
However, in order to simplify the administration of tax assessment, the IRD will automatically deduct 20% of the net rental income as the statutory allowance for repairs and outgoings. The 20% statutory allowance includes expenses incurred in renting out the property, such as government rent, building renovation fees, rent-collection fees, building management fees, insurance and mortgage interest, etc. Landlords are not required to provide the IRD with any evidence of the actual expenses incurred.
Service Process
Enquiry – You can call fill out the quotation form, call 2159-8001 or email to enquiry@conson.com.hk to contact our Accounting Officer to inquire about the accounting or tax.
Preliminary quotation – Our accounting officer will receive relevant company information from you and prepare a preliminary estimate after checking.
Review – If you agree with the preliminary estimate, we will request all daily operating records and relevant company documents. After review, the director will prepare an accurate estimate and invoice.
Payment – All fees need to be paid before the documents are finalised. We accept cash payment in person, cheque by email, bank transfer or FPS.
Prcoess – Once the documents have been signed and payment made, we will arrange for the accounts.
Completion – You are welcome to visit any branch to collect the accounts amd reports.
(Under normal circumstances, completion takes about three to four months; the actual completion time still depends on various factors, such as the completeness of the information submitted by the customer, response time and other unpredictable circumstances.)