Salaries tax and tax under personal assessment
Salaries tax and
tax under personal assessment for 2018/19 will be reduced by 75%, subject to a
ceiling of HK$20,000 (compared to the one-off tax reduction ceiling of
HK$30,000 in the previous year). The reduction will be reflected in the final
tax payable for the year of assessment 2018/19.
Salaries tax
rates
An individual’s income from employment less allowable deductions, charitable
donations and personal allowances, will be chargeable to salaries tax at the
following progressive tax rates:
|
Tax Band |
Net chargeable income |
|
First HK$50,000 at |
2% |
|
Next HK$50,000 at |
6% |
|
Next HK$50,000 at |
10% |
|
Next HK$50,000 at |
14% |
|
On the remainder at |
17% |
Maximum tax payable is still limited to tax at the standard rate of 15%
on the individual’s income from employment less allowable deductions and
charitable donations but without taking into account the personal allowances.
The change of personal allowances and deductions for the 2019/20 year of assessment are summarized below.
2017/18 2018/19
- Qualifying Voluntary Health Insurance Scheme Policy Premiums* Not applicable 8,000 per insured person
- Annuity Premiums and MPF Voluntary Contributions# Not applicable 60,000
* Effective from year of assessment 2019/20.
# Proposed to be effective from year of assessment 2019/20. The relevant bill
is being considered by the Legislative Council.
Profits Tax
Profits tax for 2018/19 will be reduced by 75% subject to a ceiling of
HK$20,000 per case (compared to the one-off tax reduction ceiling of HK$30,000
in the previous year). The reduction will be reflected in the final tax payable
for the year of assessment 2018/19.
Per the Inland Revenue (Amendment) (No. 7) Bill 2017 which was gazetted on 29
December 2017, the Inland Revenue Ordinance will be amended to introduce
two-tiered profits tax rates for (a) corporations and (b) unincorporated
businesses starting from the year of assessment 2018/19 as follows: –
|
|
Tax Rates starting from 2018/19 |
|
|
Assessable profits |
Corporations |
Unincorporated Businesses |
|
First HK$2 million |
8.25% |
7.5% |
|
Beyond the first HK$2 million |
16.5% |
15% |
Current profit tax rate is 16.5% (corporations) or 15% (unincorporated
businesses).
Other tax
related proposals and tax highlights
The Government mentioned the following:
- To promote the development of marine insurance
so that shipowners and shipping companies can enjoy better support, the
Government will offer a 50 per cent profits tax concession to eligible
insurance businesses including the marine insurance industry.
- Given that many multinational corporations
co-locate their corporate treasury centres (CTCs) with their regional
headquarters, the Government has been offering tax concessions to qualifying
CTCs since 2016. The Government will continue to enhance the relevant tax
measures to strengthen Hong Kong’s competitiveness.
Other measures
|
(1) |
Waive rates for all four quarters of 2019/20, subject to a ceiling of HK$1,500 per quarter for each rateable property (being HK$2,500 in the previous year). |
|
|
(2) |
Provide an extra one month of Comprehensive Social Security Assistance payment, Old Age Allowance, Old Age Living Allowance and Disability Allowance (being extra two months in the previous year). |
|
|
(3) |
Provide a one-off grant of HK$2,500 to each student in need. |
|
|
(4) |
Pay the examination fees for school candidates sitting for the 2020 Hong Kong Diploma of Secondary Education Examination. |
|
|
(5) |
Provide a one-off additional HK$1,000 worth of Elderly Health Care Vouchers, and increase the accumulation limit of vouchers to $8,000. |
|
|
(6) |
Waive the business registration fees for 2019/20. |
|
|
(7) |
Regularise the Technology Voucher Programme and double the funding ceiling for enterprises to HK$400,000. |
|
|
(8) |
Inject HK$1 billion into the Dedicated Fund on Branding, Upgrading and Domestic Sales, extend its geographical scope and increase the funding ceiling for enterprises. |
|
|
(9) |
Extend the application period of the special concessionary measures under the SME Financing Guarantee Scheme to end June 2020. |
|
|
(10) |
Expand the networks of Free Trade Agreement, Investment Promotion and Protection Agreement, and Comprehensive Avoidance of Double Taxation Agreement. |
|
|
(11) |
Expand the Economic and Trade Office network to strengthen external promotion and assist Hong Kong enterprises in exploring new business opportunities. |
|
|
(12) |
Estimated
production of public housing for the next 5 years is about 100,400 units. |
|
|
(13) |
To improve the existing public healthcare services, the Government will (a) earmark $10 billion as a Public Healthcare Stabilisation Fund to ensure stable funding for public healthcare services and for coping with unexpected circumstances and (b) earmark $5 billion to expedite the upgrading and acquisition of medical equipment. |
|
|
(14) |
Regarding the area of innovation and technology, the Government will (a) set aside $5.5 billion for the development of Cyberport 5 to accommodate more technology companies and start-ups, (b) set aside $16 billion for universities to enhance or refurbish campus facilities, in particular those for R&D, (c) inject $20 billion into the Research Endowment Fund of the Research Grants Council under the University Grants Committee to provide research funding, (d) establish two innovative clusters in the Science Park focusing on “A.I. and robotic technologies” and “healthcare technologies”, pooling top-notch universities and institutions to collaborate and undertake R&D activities. |
|
|
(15) |
To support tourism, the Government will allocate $353 million for the continued implementation of the Development Blueprint for Hong Kong’s Tourism Industry. |
|
|
(16) |
Regarding education, the Government will allocate $500 million to implement the IT Innovation Lab in the coming 3 school years; each aided secondary school will be granted $1 million to help students to build IT foundation. |