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Taxation in Hong Kong

Taxation in Hong Kong. Mr. Leung Wing Chung. Taxes collected by Inland Revenue Department ( 稅務局 ) (2010-11). Taxes collected by Rating and Valuation Department ( 差餉及物業估價處 ) (2010-11).

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Taxation in Hong Kong

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  1. Taxation in Hong Kong Mr. Leung Wing Chung

  2. Taxes collected by Inland Revenue Department (稅務局) (2010-11)

  3. Taxes collected by Rating and Valuation Department (差餉及物業估價處)(2010-11) Taxes / duties are also collected by the Customs and Excise Department (海關) and Transport Department (運輸署).

  4. Taxes collected by Inland Revenue Department (2010-11)

  5. Rates and Government Rent • Payable by : Owners of property (pay per quarter) • Ratable value of a property= estimated annual rent of the property • Rates = 5% of ratable value • Government rent = 3% of ratable value(only applicable to some properties)

  6. Rates (examples and class work) Question Solution • The ratable value of a flat is $80 000. If the rates are charged at 5% p.a., find the rates payable per quarter. quarter Annual Rates

  7. Class Work: Q.P. 2.20 and Q.P. 2.21 Rates (examples and class work) Question Solution • Betty pays $1200 per quarter for the rates of her flat. If the rates are charged at 5% p.a., what is the ratable value of her flat? Let $ be the ratable value. The ratable value of the flat is $96 000.

  8. Property Tax • Payable by : Owners of property (if rented out) • Tax amount= annual rental income × 80% × property tax rate • Property tax rate = 15% (in year 2012/13) • Note: • annual rental income = actual income − rates • the remaining 20% is deducted for the allowance for “repair and outgoings”.

  9. Class Work: Q.P. 2.22 and Q.P. 2.23 Property tax (examples and class work) Question Solution • The owner of a flat pays a property tax of $7200 for a year. If the property tax is 15%, what is the monthly rental income of the flat? Let $ be the monthly rental income of the flat. The monthly rental income of the flat is $5000.

  10. Salaries Tax • Progressive tax :more income → higher tax rate (%) • net chargeable income= annual income − allowances • Note: the annual income includes all income, including commissions (佣金), bonuses(花紅), leave pay(代替假期的工資)and end of contract gratuities(約滿酬金)allowances(津貼), perquisites (額外賞賜)and fringe benefits (附帶利益), etc…

  11. Salaries taxrates (2012-2013) Progressive rates: • Standard rates: • Salary tax = annual income × 15%(no allowance for standard rates) • Final result: the minimum of the two results.

  12. Salaries tax allowances (2012-13)

  13. Salaries tax allowances (2012-13)

  14. Progressive rates or Standard rates ???

  15. Examples and class work

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