Q:
|
What is salary tax’s basis?
|
A:
|
Salaries tax is imposed on all income arising in or derived from Hong Kong from an office, employment or any pension.
|
Q:
|
Taiwan business person sells the mixed packaged rice, does it subject to business tax?How to determine source of Employment?
|
A:
|
The Hong Kong tax system is based on the territorial concept. Salaries tax is imposed on all income arising in or derived from Hong Kong from an office or employment or any pension irrespective of whether tax on that income has been paid in other jurisdictions. In general, in determining the source of employment, the following three factors are relevant:
-
the place where the contract of employment was negotiated and entered into, and is enforceable;
-
the employer’s place of residence; and
-
the place of payment of the employee’s remuneration
if all three factors take place outside Hong Kong, the employment is regarded as located outside Hong Kong. However, the Inland Revenue Department reserves the right to look beyond these factors in appropriate cases
|
Q:
|
How to justify Hong Kong Employment or Non-Hong Kong Employment?
|
A:
|
-
Hong Kong Employment
If your source of employment is Hong Kong, e.g. you are employed by a Hong Kong company to work in Hong Kong, your full income is chargeable to salaries tax even if part of your duties are performed outside Hong Kong. However, you may claim exemption of income or relief from tax under certain circumstances on a year-by-year basis.
-
Non-Hong Kong Employment
If your source of employment is outside Hong Kong, e.g. you are assigned to work in Hong Kong for a few years by your non-Hong Kong employer and you have to perform part of your duties in other countries, you are only assessed on the income attributable to the services you rendered in Hong Kong, including leave pay attributable to such services, and generally according to the number of days you were in Hong Kong (day-in-day-out basis) in a year of assessment.
When calculating leave pay under these circumstances, leave days attributable to services rendered in Hong Kong are computed as follows:
Leave days attributable to services rendered in Hong Kong = Total leave days * business days in HK / Total business days in HK (Business days in Hong Kong + Business days outside Hong Kong + leave days = 365 or 366).
|
Q:
|
What kinds of corporations will receive salary tax letters and what is their responsibilities?
|
A:
|
Every company incorporated in Hong Kong receives salary tax letters. Though the employees themselves are responsible for submitting, the companies are still required to keep employees’ payment records for at least 7 years. Claim the payment to the employees in employees’ return and submit BIR56A and IR56B to IRD every year within one months after receiving it. If not received, should ask IRD to provide if necessary.
|
Q:
|
A company is required to submit ER for what kind of employees?
|
A:
|
if a company have the following four kinds of employees, they are required to declare the personal and income information of those employees.
-
single person with annual remuneration larger than HKD132,000.
-
married person
-
part-time person
-
directors ( regardless of how much paid).
|
FAQ
