Services rendered in Hong Kong?

  1. #1

    Join Date
    May 2008

    Services rendered in Hong Kong?

    I am currently living in Dongguan, China under a Rep office work visa. I am expected to relocate to Hong Kong late this year or early next year.

    My income is from a USA based company and is deposited directly into my USA bank account. I do currently pay China tax on a portion of my income paid by my China Rep Office.

    My work is primarily done in mainland China and in Indonesia. In general, I would spend about 5 months in China and 4 months in Indonesia during a work year.

    I lived under a similar situation in Singapore from 2003-2006. During that time, I was not required to pay any Singapore tax as it was determined "all income was derived from services that occurred outside of Singapore." I was able to hold an Employment Pass in Singapore under a Rep Office registration, and turned in Income Tax statements to the Singapore government, but paid no income tax.

    Would this be true if I lived in Hong Kong? How does the government determine "income derived from services rendered in Hong Kong"? Would I have to pay any Hong Kong tax?

    Any help on this subject would be greatly appreciated.

  2. #2

    Join Date
    Jun 2005
    Hong Kong

    You need to have a read of this IRD pamphlet:

    If you genuinely do no work in HK then you wouldn't pay any tax here. You would still need some sort of visa to reside here legally though. You might still be liable to some tax in China - I'm not sure what their threshold is - for Taiwan I know it's 90 days there triggers tax...

  3. #3

    Join Date
    Jul 2009

    You have 2 reliefs under section 8 of the IRO.

    If you have foreign based employment (i.e. employment contract procured, negotiated, signed outside HK with employer, control maintained by that employer, salary paid outside HK) based outside HK, but work in Hong Kong in a tax year, only the salary attributable to services rendered in Hong Kong is taxable. Therefore, if you spend 3 months working in Hong Kong, and your annual package is like HK$1.2m, then only HK$300k is subject to HK tax. Of course, if you earn a lot less than HK$1.2m, then if the HK portion of your income is less than HK$108k, you effectively pay nothing. Then you might want to consider the tax efficient housing packaging in your employment contract too.

    The other is double tax relief section 8(1)A(c) I think, where income assessable in HK is considered for tax in another jurisdiction, then that income maye be exempted from HK tax assessability. You might need to check any restrictions on this, been ages since I did HK salary tax.