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Taxes for the first year in HK

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  1. #21

    Join Date
    Nov 2005
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    ... you pay in april (2020) for the income that you have earned from Apr 2019 to Mar 2020. So yes, technically its not forward payment, but considering the fact that generally taxes are paid around 10 months after the end of the financial year, then to some guys its about forward paying the tax bill.. since the payment is on projection basis before they receive your actual income submission.

    Last edited by freeier; 14-01-2020 at 02:58 PM.

  2. #22

    Join Date
    Nov 2019
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    428
    Quote Originally Posted by TheBrit
    You never have to pay tax up front. You only ever pay tax on earned income.
    It's called "provisional tax", and yes, you do.
    traineeinvestor likes this.

  3. #23

    Join Date
    Oct 2010
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    19,588
    Quote Originally Posted by CharSiuNow
    It's called "provisional tax", and yes, you do.
    You are being asked to pay in March 2019 (and then May 2019) for income you earned from April 2018. You are paying tax on earned income!

  4. #24

    Join Date
    Jun 2011
    Posts
    19

    I'm sorry - tax is not my strong suit as I'm used to PAYE and hence I'm still lost at sea despite your helpful comments.

    I have to pay 10k a month tax. I arrived in September. Come April 2020 what is my tax bill likely to be?

    (i) $70k ($10k x 7 months)
    (ii) $170k ($10k x 17 months, i.e. 24 months minus 7 months, as Freeier suggest)
    (iii) S190k ($10k x 19 months,i.e. 7 months + 12 months for 20/21)
    (iv) some other number

    Thanks!


  5. #25

    Join Date
    Nov 2019
    Posts
    428
    Quote Originally Posted by jamo82
    I'm sorry - tax is not my strong suit as I'm used to PAYE and hence I'm still lost at sea despite your helpful comments.

    I have to pay 10k a month tax. I arrived in September. Come April 2020 what is my tax bill likely to be?

    (i) $70k ($10k x 7 months)
    (ii) $170k ($10k x 17 months, i.e. 24 months minus 7 months, as Freeier suggest)
    (iii) S190k ($10k x 19 months,i.e. 7 months + 12 months for 20/21)
    (iv) some other number

    Thanks!
    My guess is:
    - first tax bill (somewhere end of 2020): 7 * 10k minus tax reduction 20k = 50k
    - second tax bill (end of 2021): 12 * 10k minus tax reduction 20k PLUS provisional tax 2022 = 12 * 10k = 220k

    Hope to help your confusion

  6. #26

    Join Date
    Oct 2010
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    19,588
    Quote Originally Posted by jamo82
    I'm sorry - tax is not my strong suit as I'm used to PAYE and hence I'm still lost at sea despite your helpful comments.

    I have to pay 10k a month tax. I arrived in September. Come April 2020 what is my tax bill likely to be?

    (i) $70k ($10k x 7 months)
    (ii) $170k ($10k x 17 months, i.e. 24 months minus 7 months, as Freeier suggest)
    (iii) S190k ($10k x 19 months,i.e. 7 months + 12 months for 20/21)
    (iv) some other number

    Thanks!
    (i) - probably a bit less as you benefit from the whole year tax allowance despite only earning a salary for 7 months.

  7. #27

    Join Date
    Jun 2011
    Posts
    19

    Thanks - so the provisional tax only gets added on after your first FULL tax year?


  8. #28

    Join Date
    Oct 2010
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    19,588

    No, you'll be asked to pay provisional tax at the end of this calendar year, for the tax year April 2020 to March 2021. Typically you pay 75% around Dec/Jan (as you are 75% of the way through the tax year) and the remainder in April.


  9. #29

    Join Date
    Jun 2011
    Posts
    19

    Thanks - this seems to conflict with what CharSiuNow says though.

    How much would I have to pay theBrit? 75% of next year and the 7 months from this year? i.e. 50k (7 months - 20k allowance) plus 75k (75% minus 20k allowance), - in total 125k?


  10. #30

    Join Date
    Oct 2010
    Posts
    19,588

    If for some reason you don't get a bill in April 2020, then that will just be added to the bill you get at the end of 2020. Either way you earn the income before you have to pay tax on it.

    I just looked at CharSiuNow's numbers. He is wrong - ignore them.


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