First Year Tax question

Hi,


Can I confirm that in the first year of working in Hong Kong I can expect a double tax bill? Can someone confirm the timing of this, i.e. I've heard the first request is in April for the back pay, then the assessment comes for the following year with these payments due the following December and March...


Is this correct, or do they expect to pay two years of income tax in that first payment in April?


Apologies if the answer is already on here, I've tried to search with little luck.


Cheers

You will get hit with a double whammy in the first year. When they get you to pay depends on when you started work in HK, I think.


I started in HK in a November, so filed my November to March figures in the following May and got hit with request for payments in early January (100% of first year's tax plus 75% of second year provisional tax) and early April (25% balance of provisional tax for second year). Every year since the payments have been January (75%) and April (25%). It is a bit painful (the first rather lumpy payment) but then you are ahead of the game.


A Chinese colleague told me that I could request to defer the second year payment, but I did not as the same double whammy would happen the next year. I therefore don't know if that would have succeeded anyway.


A friend of mine took a very low interest Tax-Loan from the bank to help him spread the payment since he had not saved enough for that first lumpy payment. It helped him over the hump.


Hope this helps. The trick I suppose is not to spend spend spend in the first year knowing that this is coming!

[UPDATE] Please note that fee quotes stated in historic postings may be out-of-date.


In addition to tax on the past year of your income, an advance tax calculation (Provisional Tax) for Individuals will be charged on the first year of assessment (no matter the person has selected to be assessed under “Personal Assessment” or “Salaries Tax”) . The IRD will assume that the tax-payer has the same amount of income in the following year. The payment method will be, the sum of the 75% of the provisional tax plus original tax payable for that year of assessment shall be paid in first installment that normally payable in January of the coming year after the year of assessment and balance 25% shall be paid after 3 months. However, in case your income for next year is less than 90% of the previous year, you may lodge for an objection to hold over or reduce the provisional tax.


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Hello,


A quick question though: when you mention that "the IRD will assume the tax-payer has the same amount of income in the follwoing year", what do you mean?


Let's take the example of spurtio who started in November; the amount of income is quite small as you only worked for 5 months in the fiscal year. Will the IRD consider the exact same amount of revenues for the following year, or will they take into consideration the monthly income and multiply it by twelve?

Thanks for your answer,