How does the "deferred taxation system" work?

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  1. #1

    How does the "deferred taxation system" work?

    Hello,

    I am totally unfamiliar with this concept. How exactly does it work? Do you just get paid a full salary and have to deduct and save the taxable income yourself and then get sent a bill?

    Also - if there are any Aussies out there ... do you get taxedin HKG as well as Australia?

    Any advice would be greatly appreciated!

    Thanks

    Paul


  2. #2

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    >> Do you just get paid a full salary and have to deduct and save the taxable income yourself and then get sent a bill?

    Essentially yes.

    You can (if you don't trust yourself to save the money) buy tax notes every month from the inland revenue.


  3. #3

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    Quote Originally Posted by Paul Slezak:
    Do you just get paid a full salary and have to deduct and save the taxable income yourself and then get sent a bill?
    Essentially, yes. You will get sent a tax return in about May, relating to the previous 1 April - 31 March, which has to be returned within a month. Around August/September you will be sent a bill which will be the balance of any tax due for the previous year plus provisional tax for the current tax year. This needs to be paid 75% in January and 25% in April.

    There are many previous discussions here on this subject. Assuming you have some financial discipline it is preferable to Pay As You Earn in that you get to use (i.e. earn interest on) the tax amounts for up to two years longer.
    Quote Originally Posted by Paul Slezak:
    Also - if there are any Aussies out there ... do you get taxedin HKG as well as Australia?
    With the exception of Americans and one or two other places (which don't include Australia), taxation is based on the place of employment, not citizenship. If you are resident in and employed in Hong Kong then the tax on your salary will be due only in Hong Kong. (There may of course still be a tax liability in Australia on any investment income etc. that you have in Australia)
    Last edited by PDLM; 05-06-2006 at 04:16 PM.

  4. #4

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    >> Essentially, yes.

    Ack! I'm begining to sound like you.


  5. #5

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    Quote Originally Posted by KnowItAll:
    >> Essentially, yes.

    Ack! I'm begining to sound like you.
    I'm not sure which of us should be more worried by this!