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Hong Kong Fact-File Part 2:
Individual Business Domestic Taxation

2.4 Hong Kong Personal Allowances and Business Deductions

There are a number of allowances and deductions for individuals who are subject to salary tax, or are being assessed under the Personal Assessment system. The main allowances from 2008/09 and onwards are:

  • HKD108,000 for single individuals
  • HKD216,000 for married couples
  • HKD50,000 for each child (from 1st to 9th)
  • HKD50,000 for any child born during the tax year
  • HKD108,000 single parent allowance

 

The deductions allowed include maximum limits for the following:

  • HKD60,000 for self-education expenses
  • HKD60,000 for elderly residential care expenses
  • HKD100,000 for home loan expenses
  • HKD12,000 for contributions to mandatory retirement schemes

 

The above allowances and deductions are not applicable for calculation of profits tax. There are, however, a number of allowable expenses and deductions to reduce the overall tax payment. These include pretty much all expenditure necessary to run the business such as lighting, heating, rent, wages, employer contribution to mandatory pension fund and any other expenses incurred that are directly linked to the production of goods and services which are then subject to profits tax.
 

Introductory Guides

Brief, clearly written summaries with links to relevant sections of the Fact-File. The Fact-File itself is linked in full below.

 

Fact-File

Part 1: Hong Kong Business Formation for Individuals

  1. Hong Kong Individual Business Structures
  2. Hong Kong Individual Business Registration
  3. Hong Kong Individual Business Registration Cost
  4. Hong Kong Individual Business Licensing
  5. Hong Kong Foreigners in Business
  6. Hong Kong Business Organisations
  7. Hong Kong Business Accounting
  8. Hong Kong Family Business Ownership
  9. Hong Kong Venture Capital
  10. Hong Kong Individual Business Franchises

Part 2: Hong Kong Individual Business Domestic Taxation

  1. Hong Kong Individual Business Tax Residence Rules
  2. Hong Kong Permanent Establishment
  3. Hong Kong Individual Income Tax Rates and Bands
  4. Hong Kong Personal Allowances and Business Deductions
  5. Hong Kong Husband and Wife Partnerships
  6. Hong Kong Partnership Income Taxation
  7. Hong Kong Limited Companies Income Taxation
  8. Hong Kong Business Profit Retention
  9. Hong Kong Business Losses
  10. Hong Kong Value Added Tax (VAT)
  11. Hong Kong Individual Business Capital Gains Tax (CGT)
  12. Hong Kong Individual Business Other Taxes
  13. Hong Kong Individual Artists Royalties
  14. Hong Kong Individual Business Tax-Efficient Profit Distribution

Part 3: Hong Kong Individual Business International Taxation

  1. Hong Kong Individual Business International Tax Liability
  2. Hong Kong Individual Business Withholding Taxes
  3. Hong Kong Double Tax Treaties

Part 4: Hong Kong Individual Business Tax-Efficient Structures

  1. Hong Kong Individual Business Trusts and Foundations
  2. Hong Kong Individual Business for Non-Residents
  3. Hong Kong Individual Business use of Offshore
  4. Hong Kong Controlled Foreign Corporation (CFC) Rules
  5. Hong Kong Personal Estate and Inheritance Planning

Part 5: Hong Kong Small Business Incentive Programs

  1. Hong Kong Small Business Support Schemes
  2. Hong Kong Training Incentive Schemes
  3. Hong Kong R&D Tax Credits
  4. Hong Kong Individual Business Tax Holidays

Part 6: Hong Kong Individual Business Employment Issues

  1. Hong Kong Individual Business Employer Responsibilities
  2. Hong Kong Employment vs Self-Employment Tax Issues
  3. Hong Kong Apprenticeship and Work Experience Schemes
  4. Hong Kong Employee Dismissal Rules
  5. Hong Kong Business Owner Employment and Invoicing Rules

Part 7: Hong Kong Business Owner Welfare and Lifestyle

  1. Hong Kong Business Social Security
  2. Hong Kong Business Domestic Pensions
  3. Hong Kong Offshore and International Pensions
  4. Hong Kong Individual Business Healthcare
  5. Hong Kong Individual Business Banking Services
  6. Hong Kong Education
  7. Hong Kong Individual or Business Leaving Hong Kong
  8. Hong Kong Domestic Real Estate
  9. Hong Kong International Real Estate