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Taxes for the first year in HK

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  1. #31

    Join Date
    Jun 2011
    Posts
    19

    So I will only ever pay tax on money I've already earned?


  2. #32

    Join Date
    May 2019
    Posts
    124

    The Brit is correct - you don’t pay tax on anything unless it was due to you and has been paid and received by you.

    There is no PAYE here, you have to earn over your annual personal allowance of HK$132,000 before you start paying tax. Even if you’re only here for one day of a tax year you get the full $132,000 personal allowance for that tax year, so whatever you earned starting September to end of March this year needs to exceed $132,000 before you start paying anything.

    You will need to fill in a tax form for the year ended 31 March 2020 from 1 May 2020, then (normally) you will get a tax bill in July - November for a first payment in Jan 2021 and second payment in April 2021. The first payment consists of your tax due (after allowances and deductions) for year ended 31 March 2020 and the estimated tax for 75% of the tax for the year ended 31 March 2021, the payment in April 2021 is 25% of the estimated tax due for the year ended 31 March 2021.

    Clear enough?

    TheBrit likes this.

  3. #33

    Join Date
    Oct 2010
    Posts
    19,561
    Quote Originally Posted by jamo82
    So I will only ever pay tax on money I've already earned?
    Yes!!!!!

  4. #34

    Join Date
    Jun 2011
    Posts
    19

    Thanks very much - all clear now.


  5. #35

    Join Date
    Nov 2005
    Location
    Cramped island
    Posts
    3,938
    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!
    That's not what i suggested.

    What i am saying is this:

    Assuming you come in September 2019, and worked 7mths till Mar 2020.
    Total 7 mths. Assuming your tax is as you approximated, 70k in total.
    (you will likely be asked to submit tax return around June~August 2020).

    You first tax bill will be received in Dec 2020 (assuming IRD working fine this coming year).
    The tax demand will likely be:
    January 2021: 70k (for FY 19-20) + 75% * 70k (for 3/4 of provisional tax FY 20-21)
    April 2021: 25% * 70k (for remaining 1/4 of provisional tax FY 20-21).

    In total your tax bill presented to you in Jan 2021 would be 140k (2 x the 70k tax you are liable).

    For the following year assuming you tax liabilities never change.
    FY 2020-2021 your actual tax liabilities = 120k. And you submit return in Jun/July 2021.
    Then your tax bill should be:
    Jan 2022: 120k + 75% * 120k - 70K (which you have paid provision in Jan/Apr 2021).
    Apr 2022: 25% * 120k

  6. #36

    Join Date
    Nov 2019
    Posts
    414
    Quote Originally Posted by TheBrit
    I just looked at CharSiuNow's numbers. He is wrong - ignore them.
    I may be wrong on a general level, but this was my experience.
    Feel free to ignore that of course.

  7. #37

    Join Date
    Oct 2010
    Posts
    19,561
    Quote Originally Posted by CharSiuNow
    I may be wrong on a general level, but this was my experience.
    Feel free to ignore that of course.
    You are not alone. Many people get confused with provisonal tax. I've seen this exact discussion at least a dozen times on Geo, maybe more.

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