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Contractor - Taxes I’m now very confused

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  1. #11

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    Quote Originally Posted by nivek2046:
    is this applicable? (a) Control, (b) Ownership and provision of factors of production, and (c) Economic considerations
    good points, except:

    the remuneration is not paid or credited periodically (e.g. weekly or monthly) as is common with employment contracts;
    In the real world many consultants have contracts with periodic payment, by week, by fortnight, or by month, including big names PwC, Deloitte, etc. Nobody in Hong Kong will wait for a year or more to be paid. So payments are split and paid per month.

  2. #12

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    Quote Originally Posted by JAherbert:
    good points, except:



    In the real world many consultants have contracts with periodic payment, by week, by fortnight, or by month, including big names PwC, Deloitte, etc. Nobody in Hong Kong will wait for a year or more to be paid. So payments are split and paid per month.
    Yes, that's true.

    How about invoicing your "employer" on an irregular basis deliberately?

    different amounts every time?

    PS: as a sole prop, you pay your own MPF contribution. Your "employer" has no involvement.
    Last edited by nivek2046; 16-05-2024 at 01:17 PM.

  3. #13

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    At the end of the day, it will all come down to how you choose to categorize this and whether the IRD decide to challenge you and make you pay the higher salaries tax amount. And I am guessing they are more likely to come after you if the amount is worth their time. So, sure, you can set it up correctly and hope for the best and then cross your fingers see if they let it be. Which seems like how most tax things end up, at the end of the day. You do your best to structure your tax position to your advantage (based on the law, of course) and then see what happens. As long as there is no huge penalty if you get it wrong, seems like if you have a reasonable basis to set it up at the lower rate as a sole proprietorship (or whatever you end up deciding) then worth a go (but, of course, check potential penalties first if they decide it's salary).

    muzzdang likes this.

  4. #14

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    Quote Originally Posted by nivek2046:
    Yes, that's true.
    How about invoicing your "employer" on an irregular basis deliberately?
    different amounts every time?
    I wouldn't bother. even govt. is promoting Contractors forcing to pay subcontractors monthly

    https://news.rthk.hk/rthk/en/compone...9-20240516.htm

  5. #15

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    Thanks all. With a combination of comments here and ‘off the record’ tax advice received today I’m going down the sole prop route. I need to be very careful how I position this. Take a simple working example - my LinkedIn profile should just change to consultant, engaged on an appointment but no mention of with who. There is an element of truth here anyway. If this is not renewed by either party or terminated early then I’ll be looking to offer my services elsewhere on a consultancy basis. I am considered an SME in my line. I should be, I’ve been doing it since 1989!

    One other thing. Ever since coming to HK I set money aside monthly for tax and paid myself back annually because I always overegged it. I’ll do the same here but not pay myself back until I’ve got the first assessment out of the way.

    muzzdang likes this.

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