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Tax reduction for 19/20

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  1. #1

    Tax reduction for 19/20

    I recently got my first tax bill showing 20,000 reduction for 18/19; but none yet (as the figure is not yet formally announced) for 19/20 provisional tax. Therefore, I paid the full amount that they billed me (18/19 and 19/20) but with no reduction for 19/20.

    My case is I am leaving HK in the end of March (last working day March 31). I will go to the tax office in maybe the 2nd or 3rd week of March to settle my taxes. Will they give me some figure reduction for year 19/20 and therefore return some of the money I paid in advance?

    Thanks for your help


  2. #2

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    They will not give you any reduction now and you will have to pay a higher amount, but then they will ask you for your overseas contact details and they will call you later in the year if there is any reduction announced and they will give you a refund. So keep your HK bank account open for this.

    Also don't forget to open a TVC account now, deposit $60k, then claim a $60k tax deduction (saving you $10k in taxes if you are earning more than $200k per year). As soon as your tax is settled, you can close the TVC account and get your $60k back. This is just a loophole in the system you might as well exploit and get a $10k departure gift from the government.

    GentleGeorge and Sage like this.

  3. #3

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    Urelated but related. I just realized I paid my taxes late. Haven't received the usual automatic reminder email, and when I paid, no receipt confirmation either...

    ...so maybe that "civil servants work from home" was really just another government bs...🙄


  4. #4

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    Quote Originally Posted by bdw:
    Also don't forget to open a TVC account now, deposit $60k, then claim a $60k tax deduction (saving you $10k in taxes if you are earning more than $200k per year). As soon as your tax is settled, you can close the TVC account and get your $60k back. This is just a loophole in the system you might as well exploit and get a $10k departure gift from the government.
    What's a TVC account? Does the $10K savings work only if you are leaving or every year :P?

  5. #5

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    Original Post Deleted
    Yes I do (who doesn't? 😁). I was under the impression that payments notification and receipts and the like were automated... ...looks like they aren't, and it depends on someone somewhere looking for my shroff no. in a transaction report & clicking a button.

    Why they can't do it while WFH, that's the remaining question.

  6. #6

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    Quote Originally Posted by rkenia852:
    What's a TVC account? Does the $10K savings work only if you are leaving or every year :P?
    TVC is the extra voluntary MPF payments. You can put in a max $60k per year and you will save $10k per year in taxes if you are earning over $200k per year. You can do every year, but this $60k you are putting in is locked away until you retire, or leave Hong Kong. This is why I call it a "Loophole" or "Government departure gift". If you are a normal HKer it's something you need to think about and evaluate whether worthwhile or not, but for expats planning to leave HK at some stage it's a no brainer and you absolutely need to open a TVC account right now (before March 31st!!!) or you are just throwing $10k out the window.
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  7. #7

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    Quote Originally Posted by bdw:
    TVC is the extra voluntary MPF payments. You can put in a max $60k per year and you will save $10k per year in taxes if you are earning over $200k per year. You can do every year, but this $60k you are putting in is locked away until you retire, or leave Hong Kong. This is why I call it a "Loophole" or "Government departure gift". If you are a normal HKer it's something you need to think about and evaluate whether worthwhile or not, but for expats planning to leave HK at some stage it's a no brainer and you absolutely need to open a TVC account right now (before March 31st!!!) or you are just throwing $10k out the window.
    Don't get me wrong, TVC is great, but I wouldn't say its a no-brainer. What you have to take into account is you'll be investing in the MPF which has very high management fees. The cheapest management fee is 0.75%, which if you go through a normal ETF for pretty much the same product that the MPF provider is offering you (and often just investing the money in that ETF anyway) the fees will be closer to 0.20%.
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  8. #8

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    Quote Originally Posted by pin:
    Don't get me wrong, TVC is great, but I wouldn't say its a no-brainer. What you have to take into account is you'll be investing in the MPF which has very high management fees. The cheapest management fee is 0.75%, which if you go through a normal ETF for pretty much the same product that the MPF provider is offering you (and often just investing the money in that ETF anyway) the fees will be closer to 0.20%.
    Well, if you are going to do it or not, there is a 6 week clock ticking down and March 31st is the deadline for this year if you want an instant $10k reduction in your tax bill for this year sign up for the TVC now!!

    In my opinion, if your taxable income (after married person/child allowance and all that shit) is over $200k per year (which is a low threshold), expat or planning to leave HK in the next 10 years, its a no-brainer and if you don't do it you are throwing away a $10k gift.
    hongkong7 and Sage like this.

  9. #9

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    Has anyone taken up government offer to stagger loan payments? I remember something announced during the protests but can't remember what was put into place.


  10. #10

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    Quote Originally Posted by bdw:
    Well, if you are going to do it or not, there is a 6 week clock ticking down and March 31st is the deadline for this year if you want an instant $10k reduction in your tax bill for this year sign up for the TVC now!!

    In my opinion, if your taxable income (after married person/child allowance and all that shit) is over $200k per year (which is a low threshold), expat or planning to leave HK in the next 10 years, its a no-brainer and if you don't do it you are throwing away a $10k gift.
    Does "Leaving Hong Kong" require a renouncement of HK passport? I plan to go back to US in a few years and have both HK and US passports, wondering what the requirements are to get the TVC balance out. Thanks

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