Foreigners working in Hong Kong may enjoy the following preferential tax policies:
-Basic tax exemption: If the annual income is below a certain amount (usually HKD 13200), there is no need to pay salaries tax.
-Progressive tax rate: The portion exceeding the basic tax exemption amount is taxed at a progressive tax rate based on income level, ranging from 2% to 17%.
-Tax reduction and exemption:
-Specific industry talents: Foreign high-end talents in specific industries can apply for eligibility tax rates.
-Foreigners working in Hong Kong for the first three years are usually entitled to income tax reduction, with the specific reduction amount depending on individual circumstances, usually a certain percentage of annual income.
-Personal income tax incentives in the Guangdong Hong Kong Macao Greater Bay Area: Overseas (including Hong Kong, Macao, and Taiwan) high-end talents and scarce talents working in the Greater Bay Area will be subsidized according to the difference in personal income tax burden between mainland China and Hong Kong, and this subsidy is exempt from personal income tax. For example, if the amount of tax paid exceeds 15% of the taxable income, the governments of the nine cities in the Pearl River Delta will provide financial subsidies. However, this policy has a time limit (from January 1, 2019 to December 31, 2023) and must meet the relevant talent recognition conditions, such as permanent residents of Hong Kong and Macau, Hong Kong residents who have obtained the Hong Kong Immigration Scheme (for talents, professionals, and entrepreneurs), while working in the nine cities of the Pearl River Delta and paying taxes in accordance with the law, and complying with laws and regulations, scientific research ethics, and scientific research integrity.
-Other deductions and allowances: Individuals can apply for housing allowances, elderly support allowances, children’s education allowances, etc., which can reduce the amount of salary tax payable. In addition, participating in mandatory provident fund schemes and personal retirement insurance schemes can also receive certain tax exemptions.
Tax preferential policies may vary due to personal circumstances, industries, policy adjustments, and other factors, and some preferential policies have specific conditions and time limits.
When foreigners work in Hong Kong, they should timely understand the policies to ensure that they can accurately enjoy the applicable preferential tax policies and fulfill their tax obligations according to law.
