I. Income Classification and Allowance
The collection of personal income tax in Hong Kong first needs to classify taxpayers' income, including wages, rental income, dividends, interest and pensions. Every taxpayer enjoys a certain tax allowance every year to reduce his tax burden. The specific amount of tax allowance will be adjusted according to the government's annual budget.
Second, the progressive tax rate system
Hong Kong implements a progressive tax rate system, that is, the higher the income, the higher the applicable tax rate. According to Hong Kong's Taxation Ordinance, the personal income tax rate is divided into several grades, and each grade corresponds to a specific tax rate. Taxpayers determine the applicable tax rate according to their annual taxable income, and calculate the taxable amount accordingly.
Three. Tax declaration and payment
Taxpayers need to submit tax returns to the Hong Kong Inland Revenue Department within the specified time every year to declare their annual income and calculate the tax payable. The tax bureau will review the declaration form to ensure the accuracy and completeness of the declaration information. Taxpayers need to pay taxes within the specified time, otherwise they will face fines or other legal consequences.
Four. Tax planning and compliance
In order to reduce the tax burden, many taxpayers will seek advice on tax planning. This includes the rational use of preferential tax policies and the choice of appropriate investment methods. However, in tax planning, taxpayers must abide by the provisions of the Hong Kong tax law and ensure tax compliance.
To sum up:
The collection standard of personal income tax in Hong Kong is mainly based on the Tax Ordinance and relevant subsidiary legislation, and a progressive tax rate system is implemented, and the taxable amount is determined according to the income level and tax payment level of taxpayers. Require taxpayers to declare and pay taxes on time, and at the same time abide by the provisions of the Hong Kong tax law to ensure tax compliance.
Legal basis:
Chapter 1 12, Laws of Hong Kong
Tax regulations
Article 8 provides that:
In this Ordinance, unless the context otherwise requires-
(a) "Actual taxable income" means the balance of a person's total income after deducting the allowances, expenses and other payments that he is allowed to deduct under this Ordinance.
(b) "total income" means the total income of a person assessed as taxable under this Ordinance.
Article 12 stipulates:
If a person carries on any trade, profession or business in Hong Kong and obtains taxable profits arising in or derived from Hong Kong, he shall pay tax on the profits so obtained.