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Number crunching provisional salary tax

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  1. #1

    Join Date
    Oct 2016
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    Number crunching provisional salary tax

    Apologies in advance for yet another post on salaries tax. I know it is the most common question on this bit of the forum and I have reviewed the countless other posts, but I just want to clarify and confirm my understanding with some numbers...

    So let’s say I started work in HK (partway through)this tax year, let’s say the tax I owe for 2017/18 is HK$10,000 (calculated after 75%/HK$30k discount), and based on the new tax regime my tax for 2018/19 is HK$60,000 (prior to any discount that might be announced in the 2019 budget).

    After filing my tax return I receive a payment notice, I need to pay HK$55,000 (HK$10,000 from 17/18 and 75% of 18/19 tax) in Jan 2019, and the remainder in April 2019. Is that correct?

    Secondly, is it the case that when I file my tax return in 2019, do I receive a bill for any over/underpayment for the 18/19 tax year AND need to pay provisional tax for 2019/20 tax year?

    Thanks in advance!


  2. #2

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    You will pay 17/18 (discounted rate, i.e. 30k discount) + 18/19 (full rate).

    Then in 18/19, since you paid 18/19 already, you will just pay 19/20 (full rate). However if 18/19 has the discount again, then the credit (overpayment) will apply to your provisional (19/20 full rate).

    The tax payment are spread into two payments like you mentioned.


  3. #3

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    It's all in the same tax bill -- very simple and straightforward. When you stop working or have a big year--you can apply for holdover of provisional to reduce the calculation for the following year.


  4. #4

    Join Date
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    Always thought Hong Kong salary tax to be straightforward. Not for everyone then.


  5. #5

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    Quote Originally Posted by AJZ:
    Always thought Hong Kong salary tax to be straightforward. Not for everyone then.
    Thanks for your useful input !

    Anyway, just wanted to check my understanding was correct (mainly that you always get a note for provisional tax for the following year, albeit that you don’t actually need to pay it until Jan of the current year). Unfortunately some circumstantial changes mean that my tax bill next year will be significantly higher than this year so wanted to make sure I have the right amount squirrelled away!

  6. #6

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    i don't think they project your tax for full 18/19 to charge your provisional tax, do they ?

    the last i remembered they based on the earlier actual tax to charge for the provision.


  7. #7

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    Original Post Deleted
    That's my understanding, speaking to some colleagues. So given that I started part way through this tax year, will they pro-rata for the provisional for 2018/19 tax year?

    The main change in my circumstances for next year will be spouse starting work (so loss of HK$130k dependant allowance) and an extra HK$28k of tax for increased school fees due to my youngest starting school, regardless of whatever my take home salary ends up being. Obviously tax office won't know any of that so they are likely to grossly underestimate my provisional tax for 2018/19, so I guess I just keep the money aside or buy tax certificates and take the hit in 2019/20...

  8. #8

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    Original Post Deleted
    My understanding is that, as the school fees are paid by my employer, they are classed as a taxable benefit and so the cost of the fees are added to my income for the purposes of salary tax.
    Last edited by Firemin; 15-03-2018 at 02:17 PM.