Under Section 8(1) of the Hong Kong Inland Revenue Ordinance (“HK IRO”), pension arising in Hong Kong is chargeable to salaries tax.

No definition of “pension” is made in HK IRO. Generally, pension refers to an annuity or other recurring periodic payments for consideration of past services.

Section 9(3) of HK IRO extends the charge to cover a pension which is voluntary or is capable of being discontinued.

Like employment income, only the pension arising in or derived from Hong Kong is assessable. This follows that we have to determine the location of the source of the pension. From Hong Kong Inland Revenue Department’s view, the place where the pension is managed and controlled is the decisive factor in determining the source of the pension.

Generally, that means the place of the business that employed the pensioner. But in some special cases, it can be located at the place where the trustee has power to control the fund.

In computing the income of a taxpayer, his pension attributable to services rendered in any office or employment but not attributable to services rendered in Hong Kong shall be excluded (other than employment by the Government).

Source：Hong Kong Inland Revenue Department’s website

- https://www.gov.hk/en/residents/taxes/salaries/salariestax/exemption/index.htm