Tax Obligations for Non-Residents Working in Hong Kong
As a non-resident working in Hong Kong, you are liable to salaries tax but not all income is chargeable. This article will give you details on chargeable and non-chargeable income, and tax clearance when leaving Hong Kong.
Chargeable and Non-chargeable Income
If you are chargeable to tax for any year of assessment, you must notify the Inland Revenue Department (IRD) in writing not later than 4 months after the end of the basis period for the year in which you are so chargeable unless you have already received a return from IRD.
If you have received a tax return from IRD, you must complete and submit it by the due date for filing.
Please note that not all income is chargeable; but you need to report the following incomes in your tax return:
- Salaries, wages, fees and director's fees
- Commissions, bonuses, leave pay and gratuities
- Allowances, perquisites and fringe benefits
- Tips from any person
- Salary tax paid by your employer
- Value of a place of residence provided by your employer or an associated corporation
- Share awards and share options
- Back pay, contract gratuities, deferred pay and pay in arrears
- Termination payments and retirement benefits
- Payments in lieu of notice accrued on or after 1 April 2012
You are not required to report the following income:
- Severance payments and long service payments
- Jury fees
Tax Clearance When Leaving Hong Kong
The Inland Revenue Ordinance (IRO) provides that any person chargeable to tax and intending to leave Hong Kong shall notify the IRD not later than 1 month before the expected date of departure. Upon receipt of the notification, the IRD will decide whether the person leaving is required to settle all tax liabilities prior to departure.
Failure to comply with such requirements by the individual may result in penal actions.
However, the IRO also provides that employees who travel frequently in the course of their employments do not have to notify their departure. They will file tax returns and pay taxes annually.
You can pay tax by various means. Electronic tax payment is becoming more popular and convenient. You can pay tax electronically by phone (with PPS account), Internet or bank Automatic Teller Machine (ATM). You can even pay tax from overseas, whether or not you have an account with a Hong Kong bank.
For more details on the above, please contact Kenneth Au at firstname.lastname@example.org/+ 852 35529096 or Kevin Lei at email@example.com/ + 852 3552 9096 at Zetland Tax Advisors