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Guide to US Taxation of Hong Kong Income

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Living overseas especially in Hong Kong is an excellent choice and a great business opportunity. The place has an impressive culture and expansive skyline. Although, the cost of living is high, yet one can easily settle into the nation while on business or assignment.

Guide to US Expat Tax in Hong Kong

Firstly, we discuss US Expat Tax Hong Kong. If you are a US citizen, all the international incomes are subjected to taxation and reporting. Thus, annual tax returns due on April 15 are mandatory for the citizens inside the country and June 15 for those residing outside the nation.

To assessment of US Taxation of Hong Kong Income, both are treated differently. Also, there exist numerous rebates and incentives for such international taxpayers. Therefore, the support of the right expert is mandatory to ensure the compliance and savings on such income.

Hong Kong Expat income taxes and calculations

In Hong Kong, any individual earning income that arises from an Hong Kong office or employment source or through services delivered in the nation (for a period ranging beyond 60 days in a financial year) are taken into consideration for the calculation of income tax in the nation.

The nation observes that US Expat Tax Hong Kong may be paid on territory basis. Hence, there is no concept of tax residency or residence status rarely has any significance in calculation of a tax liability.

The government taxes for the income earned inside the nation itself. Thus, taxes range from 2 to 17 percent – depending on the income level of the individual. Another important alternative is to go for a standard rate of 15 percent per annum. Thus, if you are a US citizen, you need to approach USA Tax Services Hong Kong to gain the right results for handling your national and international taxes.

Tax year in Hong Kong and payment rules

A normal tax year starts from April 1 and ends on March 31. Penalties apply for any form of breaches in the time limits of the income tax returns.

As a result of the same, the right understanding of US Taxation of Hong Kong Income is important. The right agency will guide you through the process and compliance strategies for both the nation’s in the best manner. This is important to ensure that you do not have to face the burden of dual taxation on your limited income.

Expat tax withholding in the nation

Undoubtedly, the experts of the best USA Tax Services Hong Kong will make the process of taxation easy for you. However, a brief understanding of the same is also important for you.

Hence, the nation charges no payroll or withholding tax for the salaried class. However, the same does apply to citizens who are to leave the nation for beyond one month. Profits, property and salary – all are taken under the system of prepaid taxes called as provisional tax.

This assessment of a tax year is an extensive estimate based on your past year’s income and assessment. This can be paid in two installments –

  • One of value of 75 percent of the last year’s assessment payable at the final quarter of the taxation year
  • The rest of the above value is payable after the expiry of three months from this time.

As a result, when actual income for the taxation year is calculated – a final tax assessment is issued. This acknowledges the provisional tax that is already paid by the person. Therefore, the final tax payable must be submitted at the same time as the 75 percent installment of the tax of the following year.

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