2017/18 Hong Kong Budget Summary

Transcription

1 Hong Kong Budget Summary Hong Kong Budget Summary Highlights Profits Tax A one-off tax reduction of 75% of profits tax for, subject to a ceiling of 20,000 Salaries Tax A one-off tax reduction of 75% of salaries tax and tax under personal assessment for, subject to a ceiling of 20,000 The marginal bands for salaries tax are widened from the current 40,000 to 45,000 The following allowances / deduction are increased: - Dependent Brother or Sister Allowance - Disabled Dependant Allowance - Deduction ceiling of Self-Education Expenses The entitlement period for the tax reduction for home loan interest is extended from 15 to 20 years of assessment Other Levies Rates for all quarters of to be waived, subject to a ceiling of 1,000 per quarter for each rateable property The First Registration Tax of electric commercial vehicles, motor cycles and motor tricycles will be fully waived. The First Registration Tax waiver for electric private cars will be capped at 97,500. The Financial Secretary, the Honourable Paul M. P. Chan, delivered the budget speech of the Government in the Legislative Council on 22 February Estimates for The Financial Secretary estimates that the total Government revenue to be billion and the overall expenditure to be billion including operating expenditure of billion for. The Financial Secretary forecasts a surplus of 16.3 billion in the Consolidated Account in the coming year. The fiscal reserves are estimated to be 952 billion by the end of March Taxes Local tax reliefs A summary of the major tax relief measures proposed by the Financial Secretary after taking into account the financial position and economic performance of Hong Kong is set out in the highlights table on the left. Other potential tax-related developments The Government is seeking to: expand the network of Comprehensive Avoidance of Double Taxation Agreements with other jurisdictions provide financial support for the abolishment of the Mandatory Provident Fund offsetting arrangement explore enhanced tax deductions for innovation and technology expenditure introduce tax concession to promote aircraft leasing and financing extend the profits tax exemption to onshore privatelyoffered open-ended fund companies examine to provide tax deduction for the purchase of regulated health insurance products 1

2 Hong Kong Budget Summary Profits Tax Standard Rate For corporations 16.5% 16.5% For persons other than corporations (Unincorporated business) 15.0% 15.0% Property Tax Standard Rate 15% 15% Salaries Tax Standard Rate Progressive Rates On income after deduction of allowable outgoings and charitable donations but before personal allowances On net chargeable income (i.e. net income after deduction of allowable outgoings, charitable donations and personal allowances) 15% 15% First 45,000 40, % 2.0% Next 45,000 40, % 7.0% Next 45,000 40, % 12.0% Balance 17.0% 17.0% Salaries tax payable is calculated at progressive rates on a taxpayer s net chargeable income or at standard rate on his/her net income (before deduction of the allowances), whichever is lower. 2

3 Hong Kong Budget Summary Salaries Tax continued Personal Allowances Basic Allowance 132, ,000 Married Person s Allowance 264, ,000 Single Parent Allowance For divorced/ separated parent responsible for the sole or predominant care of his/her child(ren) 132, ,000 Child Allowance First to ninth child (each) 100, ,000 Additional allowance (for each child in the year of birth) 100, ,000 Dependent Parent and Dependent Grandparent Allowance* (Each Parent ordinarily resident in Hong Kong) * Dependent Parent Allowance and Dependent Grandparent Allowance cannot be granted in the same tax year in respect of the same individual 60 years old (or eligible to claim an allowance under the Government s Disability Allowance Scheme) Basic allowance 46,000 46,000 Additional allowance (residing with taxpayer continuously throughout the year) years old 46,000 46,000 Basic allowance 23,000 23,000 Additional allowance (residing with taxpayer continuously throughout the year) 23,000 23,000 Dependent Brother or Sister Allowance 37,500 33,000 (Each dependent) Disabled Dependant Allowance (Each dependent) 75,000 66,000 Deductions Expenses of Self-Education Maximum deduction 100,000 80,000 Home Loan Interest Maximum deduction (Property in Hong Kong and used as principal place of residence, can be claimed for 20 years, whether continuous or not) 100, ,000 Mandatory Contributions to Recognised Retirement Schemes Elderly Residential Care Expenses Maximum deduction 18,000 18,000 Maximum deduction 92,000 92,000 Approved Charitable Donations Maximum deduction (% of assessable income net of allowable expenses and depreciation allowances) 35% 35% 3

4 Hong Kong Budget Summary Stamp Duty Share transfers (0.10% on each of the bought note and sold note) 0.20% 0.20% Sale or transfer of immovable property could be subject to the following stamp duty: - Ad valorem stamp duty ( AVD ) - Buyer s stamp duty ( BSD ) - Special stamp duty ( SSD ) AVD Unless specifically exempt, AVD is payable at Scale 1 on an agreement for sale or for the acquisition of any property, if the agreement is executed on or after 23 February Scale 1 does not apply to an agreement/ conveyance for a residential property where the purchaser/ transferee is a Hong Kong permanent resident acting on his/ her own behalf and does not own any other residential property in Hong Kong at the time of acquisition of the property. In this case, lower rates (Scale 2) will apply. Scale 1 Consideration or value of property whichever is higher AVD Rates Scale 2 Up to 2,000, % 2,000,001 2,176,470 30, % of excess over 2,000,000 2,176,471 3,000, % 3,000,001 3,290,330 90, % of excess over 3,000,000 3,290,331 4,000, % 4,000,001 4,428, , % of excess over 4,000,000 4,428,581 6,000, % 6,000,001 6,720, , % of excess over 6,000,000 6,720,001 20,000, % 20,000,001 21,739,130 1,500, % of excess over 20,000,000 21,739,131 and above 8.50% Consideration or value of property whichever is higher AVD Rates Up to 2,000, ,000,001 2,351, % of excess over 2,000,000 2,351,760 3,000, % 3,000,001 3,290,320 45, % of excess over 3,000,000 3,290,321 4,000, % 4,000,001 4,428,570 90, % of excess over 4,000,000 4,428,571 6,000, % 6,000,001 6,720, , % of excess over 6,000,000 6,720,001 20,000, % 20,000,001 21,739, , % of excess over 20,000,000 21,739,121 and above 4.25% In February 2017, a bill was introduced into the Legislative Council to propose the increase of the AVD rate for residential property transactions to a flat rate of 15% of the consideration or value of the residential property, whichever is higher. Subject to enactment of the relevant legislation by the Legislative Council, any instrument executed on or after 5 November 2016 for the sale and purchase or transfer of residential property, unless specifically exempt, will be subject to the proposed new AVD rate. 4

5 Hong Kong Budget Summary SSD Any residential properties in Hong Kong acquired on or after 27 October 2012 by an individual or a company (irrespective of its place of incorporation) and resold within 36 months from the date of acquisition are subject to SSD calculated based on the stated consideration for the transaction or the market value of the residential property, whichever is higher. The relevant SSD rates are stated in the table below. Period within which a residential property is re-sold after acquisition 6 months or less 6 to 12 months 12 to 36 months SSD rates (Reselling a residential property acquired on or after 27 October 2012) 20% 15% 10% BSD Unless specifically exempt, BSD is payable on an agreement for sale or a conveyance on sale for the acquisition of any residential property executed on or after 27 October 2012, except where the purchaser or the transferee is a Hong Kong permanent resident acquiring the property on his/her own behalf. BSD is charged at a flat rate of 15% on higher of the stated consideration or market value of the residential property. The information in this leaflet is based on the Budget Speech delivered by the Financial Secretary on 22 February Amendments after publication of this leaflet may lead to further changes. Should you wish to discuss any relating matters, please contact us. Moore Stephens Tax Services Limited T info@moorestephens.com.hk Helen Tang Managing Director T helentang@moorestephens.com.hk Loren Chan Tax Director T lorenchan@moorestephens.com.hk Winnie Tsui Tax Director T winnietsui@moorestephens.com.hk Cecilia Hung Senior Tax Manager T ceciliahung@moorestephens.com.hk The above budget summary is for your general reference only and should not be relied upon as any formal tax opinion without seeking professional advice. All of the above measures as proposed by the Financial Secretary will be subject to enactment of the relevant legislations. Moore Stephens will not take any responsibilities for any loss incurred as a result of relying on the above information. Printed and published by Moore Stephens Hong Kong, a member of Moore Stephens International Limited, a worldwide network of independent firms Moore Stephens