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THE BUDGET 2024/25 OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION


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

 

 


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





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