HK Tax and Air Miles

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  1. #21

    Join Date
    Oct 2004
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    Midlevels / USA (MD) / London
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    2,217

    One other trick--not sure if it still works--is with British Air and Asia Miles. If your "local address" for BA's Executive Club is in Hong Kong, and you fly on a BA flight, you get both BA miles and Asia miles (2 for 1 basically). Not sure if that is still in effect, but it was a good system.

    http://www.flyertalk.com/ is the best mileage forum I've found. You can get some great answers there on which program offers the best benefits.


  2. #22

    Join Date
    Jun 2005
    Location
    Hong Kong
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    23,221

    Er, no you don't (you haven't in the last 7 years at least). What you get is "Status Points" on BAEC and "miles" on AsiaMiles. The Status Points aren't redeemable for anything - they simply determine whether you have a blue, silver or gold card and the perqs that go with it. The AsiaMiles are the only thing you can use to redeem awards.

    Agreed that Flyertalk is a great resource - I'm a regular on the Cathay and OneWorld forums.


  3. #23

    Join Date
    Jun 2006
    Posts
    117

    Just in case it might be interesting for some of you:

    After having chatted with the Citibank CS guy I found out that it is possible to 'indirectly' settle IRD bills with the Cathay co-branded CC. There is no way to settle it directly, but you can apply for a loan issued as a cheque. It's even possible to apply for it online by using the Citibank website to login to your CC account ("Click-A-Check"). With that cheque you can then pay the IRD.

    But obviously a loan is always inevitably linked with interest rates and the best off-the-shelf interest rate is something like 1.98% per month. There is a low interest rate promotion with around 0.59% per month, but this will only be available to a few selected CC holders (most probably for those with a very high spending anyway). Maybe even an extra handling fee will apply if you pay back the loan earlier than the minimum loan period of 6 months.

    They specifically told me that even if I would have enough money on the CC account, I would still need to apply for that kind of loan. I assume it's similar like the inevitable Cash Advance fee. And as mentioned by PDLM already, no Asiamiles will be credited for transactions to the IRD in any case.

    That's not really interesting for me, as I rather prefer to pay my taxes without paying any interest. It may only make sense for some to easier reach an annual spending of more than HKD 150,000 to get the annual fee waiver of HKD 1,800 for a Cathay Platinum Select Preferred card. It has been confirmed that IRD payments will at least be accounted into the annual CC spending to determine the annual fee waiver eligibility. The break-even for 1.98% per month and an assumed HKD 500 handling fee for early re-payment of the loan would be at HKD 65,657 or less tax payment per year and for 0.59% at HKD 220339 or less if you settle your CC bill immediately. The latter one should be sufficient to all those ones who are interested in collecting Asiamiles at all, as the taxable annual income for that HKD 220K tax amount would be somewhere above HKD 1,37M


  4. #24

    Join Date
    Jun 2005
    Location
    Hong Kong
    Posts
    23,221

    Thanks for the update.

    I was with you up until the final couple of sentences... what makes you think that people on higher salaries aren't still looking to bank AsiaMiles? You'd have to be earning a lot more than HK$1.5M a year before first class tickets to New York (at, say, HK$100K per time) become insignificant, but you can easily run enough AsiaMiles on your credit card to get one for "free" each year, particularly if you a putting a load of company-reimbursable expenses through your personal card. Spending AsaiMiles on economy fares are really a very poor use of them.


  5. #25

    Join Date
    Jun 2006
    Posts
    117

    Ah yes, you are of course right and my wording was wrong.

    What I forgot to mention was that the only benefit of getting the annual fee waiver for the CC would not matter that much with a taxable income of HKD 1.4M a year any more. The probability to spend more than HKD 150K annually with your CC (e.g. "company-reimbursable expenses ") would already generate the fee waiver for those ones collecting Asiamiles, so that they would not need to take up such a loan at all.

    Sorry for that, but I was almost on the way out of the office before...


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