On 28th February 2024, the Finance Secretary of the Hong Kong Special Administrative Region, Mr. Paul Chan, announced the 2024/25 fiscal policy of the government. The most important points of the policy that will enter into force on 1st April 2024 are as follows:
1. Property Market
The Special Stamp Duty, Buyers Stamp Duty, and New Residential Stamp Duty will be canceled for residential properties with immediate effect.
For immovable property in Hong Kong, stamp duty is calculated at rates which vary with the amount/value of the consideration or value of the property.
2. Net Income / Tax rates
2.1. Salaries Tax
The Two-tiered standard rates for salaries tax and tax under personal assessment will be:
- HK$5 million or below will remain unchanged at 15%.
- Above HK$5 million. First HK$5 million at 15% and portion exceeding HK$5 million at 16%.
Proposed Changes to Standard Rate:
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.
Net income | Present Standard Rate | Net income | Proposed Standard Rate |
| (%) |
| (%) |
Any amount | 15 | First $5,000,000 | 15 |
|
| Remainder | 16 |
Salaries Tax and tax under personal assessment -100% tax reduction subject to a cap at HK$3,000 per case.
Assessable Income HK$ |
No. of taxpayers | Average amount of tax reduction | Average % of tax reduced |
$200,000 and below | 187,000 | $770 | 100% |
$200,001 to $300,000 | 391,000 | $2,230 | 57% |
$300,001 to $400,000 | 373,000 | $2,560 | 27% |
$400,001 to $600,000 | 474,000 | $2,720 | 13% |
$600,001 to $900,000 | 335,000 | $2,850 | 6% |
Above $900,000 | 303,000 | $2,910 | 1% |
Total | 2,063,000 |
|
|
2.2. Profits Tax
100% tax reduction subject to a cap at HK$3,000 per case.
Assessable Profits HK$ |
No. of businesses# | Average amount of tax reduction | Average % of tax reduced |
$100,000 and below | 49,700 | $2,000 | 46% |
$100,001 to $200,000 | 20,500 | $3,000 | 18% |
$200,001 to $300,000 | 11,800 | $3,000 | 11% |
$300,001 to $400,000 | 8,200 | $3,000 | 8% |
$400,001 to $600,000 | 11,400 | $3,000 | 6% |
$600,001 to $900,000 | 10,900 | $3,000 | 4% |
Above $900,000 | 47,700 | $3,000 | 0.1% |
Total | 160,200 |
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|
3. Progressive rating system for domestic properties
It will be affecting domestic properties with rateable value over HK$500,000 only.
Progressive Rating System for Domestic Tenements with effect from 1st quarter of January to March 2025 onwards:
The annual rateable value (RV) of domestic tenements (Monthly RV) / Rates % charges
- HK$550,000 or below will remain unchanged at 5%
- HK$550,001 - HK$800,000. First HK$550,000 at 5% and next HK$250,000 at 8%.
- Above HK$800,000 . First HK$550,000 at 5%, next HK$250,000 at 8% and portion above HK$800,000 at 12%.
Example:
Annual rateable value (RV) of domestic tenements / Annual rate payable
HK$550,000 or below / Remains unchanged.
HK$600,000 / Additional payment of HK$1,500.
HK$800,000 / Addition payment of HK$7,500.
HK$1,000,000 / Additional payment of HK$21,500.
HK$2,000,000 / Additional payment of HK$91,500.
4. Government Fees
The Business registration fees will increase by HK$200 to HK$2,200 per annum from 1 April 2024. The Business registration levy of HK$150 will be waived for 2 years.
If you require more information about the Budget Policy 2024/25 of the Government of the Hong Kong Special Administrative Region and other tax issues in the region, do not hesitate to contact us at +852 2528 4999 or by email at: info@la-nao.com
Sincerely,
La Nao Consulting
