Salaries tax

Salaries tax in the Hong Kong taxation system is Direct tax and also classified as Income tax.

According to Cap.112 Hong Kong Ordinance, Inland Revenue Ordinance (abbreviated to IRO) IRO Section 8, unless otherwise provided, salaries tax is chargeable on income from any office, employment and pensions for a year of assessment arising in or derived from Hong Kong.

Salaries tax is also charged on the unrealized capital gain of shares or options granted as part of an employee share scheme that are subject to a vesting period. The taxing events in this case are when the vesting period ends or when the employee leaves Hong Kong. Because Hong Kong does not have double tax agreements, this can lead to double taxation on employees arriving and leaving Hong Kong.

Year of Assessment

The period of assessment is from April 1 to March 31 of the following year.

Income from office

An office holder is a position is independent form any person and be refilled (e.g. company director.)<br /> The source of income from an office is determined by the location of the office. The key factor is the place of management and control of the office. For example, if the directors hold one of their board meetings in Hong Kong, then the income will be subject to salaries tax fully without time apportionment.

Section 8

(1A) Specify the coverage.

(a) Include Income related to Service render in Hong Kong.

(b) Exclude Income related to Air / Sea Crew and income from all service that is not...
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