Hong Kong Personal Income Tax Collection Standards

Hong Kong's personal income tax collection standards are mainly based on the "Inland Revenue Ordinance" and relevant subsidiary legislation. It implements a progressive tax rate system and determines the amount of tax payable based on the taxpayer's income level and tax grade.

1. Income classification and exemption amount

The collection of Hong Kong personal income tax first requires the classification of taxpayers’ income, including salary, rental income, dividends, interest, pensions, etc. . Each taxpayer is entitled to a certain amount of tax exemption each year to reduce his or her tax burden. The specific amount of tax exemption will be adjusted according to the government's annual budget.

2. Progressive tax rate system

Hong Kong implements a progressive tax rate system, that is, the higher the income, the higher the applicable tax rate. According to the provisions of Hong Kong's Inland Revenue Ordinance, personal income tax rates are divided into multiple levels, and each level corresponds to a specific tax rate. Taxpayers determine the applicable tax rate based on their annual taxable income and calculate the tax payable accordingly.

3. Tax declaration and payment

Taxpayers need to submit tax returns to the Hong Kong Inland Revenue Department within the designated time each year, report their annual income, and calculate the amount of tax payable . The tax bureau will review the declaration form to ensure the accuracy and completeness of the declaration information. Taxpayers are required to pay taxes within the specified time, otherwise they will face fines or other legal consequences.

4. Tax Planning and Compliance

In order to reduce their tax burden, many taxpayers will seek tax planning advice. This includes rational use of tax incentives, choosing appropriate investment methods, etc. However, when conducting tax planning, taxpayers must comply with Hong Kong tax laws and regulations to ensure tax compliance.

In summary:

Hong Kong's personal income tax collection standards are mainly based on the "Inland Revenue Ordinance" and relevant subsidiary legislation. A progressive tax rate system is implemented and is determined based on the taxpayer's income level and tax grade. Amount of tax payable. Taxpayers need to declare and pay taxes on time, and at the same time comply with Hong Kong tax laws to ensure tax compliance.

Legal basis:

Chapter 112 of the Laws of Hong Kong

Article 8 of the Inland Revenue Ordinance

Article 8:

In this Ordinance, unless the context otherwise requires—

(a) “Amount of taxable income” means the total income of a person after deducting the The balance after deductions for allowances, expenses and other amounts permitted under this Ordinance;

(b) "Total income" means the total income of a person assessed as chargeable to tax under this Ordinance.

Section 12 provides:

Any person who carries on any trade, profession or business in Hong Kong and derives taxable profits arising in or derived from Hong Kong shall pays tax on the profits so derived.