Moving to HK in Sep/Oct.

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  1. #21

    Join Date
    Jun 2005
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    Hong Kong
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    23,207
    Quote Originally Posted by kasumen:
    On the other hand, I have been advised that the whole sum of rental is tax deductible (If it is paid by ourselves), is that right?
    No. See the document that I linked to in my previous post.

  2. #22

    Join Date
    Jul 2006
    Posts
    22

    PDLM, I have basically glance through the document but still not very sure how it works. Assuming proper control is in place, rental paid by employee per month is HK$10,000

    Salary HK$180,000
    Housing Allowance HK$120,000
    Total package HK$300,000

    Therefore,
    Income HK$300,000
    RV HK$300,000*10%-HK$120,000 (HK$ 90,000)
    Assessable Income HK$210,000

    Am I calculating it correctly? Doesn't seems logical to me.


  3. #23

    Join Date
    Jun 2005
    Location
    Hong Kong
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    23,207

    No.

    Salary = HK$180,000
    Taxable value of Housing allowance (regardless of how big that housing allowance is, provided that the employer can show that you spend it all on rent) = HK$18,000 (10% of salary)

    Total income for tax purposes: HK$198,000

    Note that if you get any bonuses then these will also increase the taxable value of your housing allowance.

    So if, for example, you get a bonus of HK$20,000 at the end of the year then:

    Salary = $180,000
    Bonus = $20,000

    Taxable value of housing = $20,000 (10% of salary + bonus)

    Total income for tax purposes = $220,000


  4. #24

    Join Date
    Apr 2005
    Location
    Sai Kung
    Posts
    8,561

    that's what i thought....no where did he say he was getting a housing allowance, only that he could deduct rental payments...

    i used to own a company and hadd rental payments as part of my "package" to lower taxes, but never did i get the entire amount deducted....


  5. #25

    Join Date
    Jul 2006
    Posts
    22

    IC. Fully understand now. Well, I am being told the total sum of rental is tax deductible, that makes me so confuse. Thanks for the explaination. All of you are very helpful!


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