There is no general income tax in Hong Kong (SAR). For income to be subject to tax, it must fall within one of the specific heads of taxation. Salaries tax – on income from an office, employment and any pension. Profits tax – on income from a trade, profession or business.
Is Hong Kong a tax free country?
Hong Kong is considered a leading tax haven due to its laws that limit taxation on the island’s wealthy foreign residents and corporations. In fact, in 2020, accounting firm PwC and the World Bank ranked Hong Kong as the country with the most friendly tax system, second only to Bahrain.
Do foreigners pay income tax in Hong Kong?
There is income tax for every individual in Hong Kong. Even foreigners have to pay taxes. … Royalties and/or fees paid to non-resident/overseas entertainers or sportsmen for their performances in Hong Kong are subjected to withholding tax on their assessable profits.
How much tax do you pay in Hong Kong?
Please, note that the basic allowance applicable to all tax payers in Hong Kong is 132,000 HKD (2018/19 onwards#).
Personal Income Tax Rates.
|Net Chargeable Income (in HKD currency)||Rate|
|0– 50,000 HKD||2%|
|50,001– 100,000 HKD||6%|
|100,001– 150,000 HKD||10%|
|150,001– 200,000 HKD||14%|
How can I avoid tax in Hong Kong?
9 Ways to Reduce Your Personal Tax in Hong Kong
- Home Loan Interest Allowance. …
- Deduction for Housing. …
- You Can Choose Your Tax Rate. …
- Get Deductions for Your Donations to Charitable Organisations. …
- Deduct Your Mandatory Provident Fund (MPF) From Your Income. …
- Have a Family. …
- IRD Can Hold Over Your Provisional Tax.
Why Hong Kong has no tax?
In addition, under Article 106 of the Hong Kong Basic Law, Hong Kong has independent public finance, and no tax revenue is handed over to the Central Government in China. The taxation system in Hong Kong is generally considered to be one of the most simple, transparent, and straightforward systems in the world.
Do freelancers pay tax in Hong Kong?
Unlike other employees, self-employed individuals should not let their taxes be automatically deducted from what they earn. … Therefore, if you are a freelancer or self-employed, it is mandatory that you pay tax.
Why Hong Kong is costly?
Hong Kong has the most expensive housing market in the world. Rent is so high, many can only afford to live in subdivided apartments known as “coffin homes.” But the problem isn’t land scarcity. Hong Kong has the most expensive housing market in the world.