Posted by
AlexU
19 yrs ago
Can somebody eplain how the tax system works for my first year in HKG, I believe you pay double??
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Oski
19 yrs ago
If you just arrived, (or after 31 March) the inland revenue dept. most likely will not send you a tax bill this year. After 31 Mar 08, your employer will report to IRD your earnings from 1 apr 07 to 31 mar 08, IRD will send you a tax return form for you to complete and mail back to them. Around this time next year, IRD will bill you on earnings from 1 apr 07 to 31 Mar 08, plus the IRD will assume you will earn at least 90% of what you earn in that period in 1/4/08 - 31/3/09 period, then bill you 75% of tax applicable to that assumed earnings. you will need to pay at end of 2008.
BTW, top salary tax rate is 16%. so if you set aside that much of each paycheck, you'll be fine.
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Oski
19 yrs ago
Out of curiousity, Saikunga, what did the IRD charge you on your first bill? On your post, you wrote they charged you 12 month current, then 12 month future. let's say you arrived June of 06, did they charge you current year to March 07, then another year to March 08? If they did then you must be the only person in HK to be charged 08 tax in 06. Not possible. Legally they can only ask you to pay "provisional" tax from Jun to Mar (next year) and nothing more. Better check your records, if you really were charged 24 months on arrival, there must have been a mistake, and you can get it back.
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Just remember that any company benefits such as housing, schooling, travel allowances etc are also TAXABLE. you pay taxes on anything your employer gives you - even food allowance!
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Oski
19 yrs ago
Saikunga, thanks for sharing that history. I have no exerience on how things were prior to 1997. I am reasonably sure that in its present form, IRD does not charge provisional salary tax past end of current fiscal year. (March 2008). You can trust me on this, no one will be bill provisional salary tax for period ending Mar 2009 in 2007. So for AlexU, even though there maybe a small chance you will be asked to file for taxes this year, you can rest assured that you will not be asked to pay for 2 years of tax in 2007. However, (like most of us.) you will most likely get a bill covering this year all the way to March 09 sometime in 2008.
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Good news is that at the oddest of times, we get nice fat cheques from the IR dept :-) which is unexpected , unexplained and keeps me in 9th heaven for atleat a week or so :-) :-) :-) :-)
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