Hong Kong’s Financial Secretary Paul Chan delivered the 2024/25 budget speech on 28 February 2024. Key measures include a reduction in salaries tax and tax under personal assessment for 2023/24 by 100%, capped at HKD 3,000.
The tax reduction will reduce the amount of tax payable by taxpayers for the year of assessment 2023/24. Taxpayers should file their profits tax returns and tax returns for individuals for the year of assessment 2023/24 as usual. Upon enactment of the relevant legislation, the Inland Revenue Department will effect the reduction in the final assessment.
Taxpayers chargeable at progressive rates will not be affected.
Carol Lam
Celestine Yeung
BDO in Hong Kong
The tax reduction will reduce the amount of tax payable by taxpayers for the year of assessment 2023/24. Taxpayers should file their profits tax returns and tax returns for individuals for the year of assessment 2023/24 as usual. Upon enactment of the relevant legislation, the Inland Revenue Department will effect the reduction in the final assessment.
Two-tiered standard rates regime for salaries tax
The budget also proposes the implementation of a two-tiered standard rates regime for salaries tax and tax under personal assessment. For taxpayers chargeable at the standard rate whose net income exceeds HKD 5 million, the first HKD 5 million of net income will continue to be subject to the standard 15% rate. The portion of net income exceeding $5 million will be subject to a standard rate of 16%. After enactment of the relevant legislation, the Inland Revenue Department will apply the two-tiered standard rates in calculating the provisional salaries tax for the year of assessment 2024/25.Taxpayers chargeable at progressive rates will not be affected.
Carol Lam
Celestine Yeung
BDO in Hong Kong