Hong Kong’s higher than expected budget surplus of HKD138 billion (approx. USD18 billion) versus last year’s forecast of HKD16.3 billion should not come as a huge surprise, for those following the real estate market in Hong Kong, considering that primary drivers of the government’s increase in revenue are income from land sales and stamp duty.
Probably the most impactful measure for businesses and individuals is the one-off reduction of tax by 75% up to a ceiling of HKD30,000. In addition, for Salaries Tax the bands of the progressive rate have been adjusted to:
- For the first HKD50,000 - 2%
- For the next HKD50,000 - 6%
- For the next HKD50,000 - 10%
- For the next HKD50,000 - 14%
- For the remainder - 17%
Businesses on the other hand will benefit from another measure that was already introduced earlier this year, before the budget. Hong Kong is introducing a two tier tax regime, which taxes business income at half the standard tax rate for the first HKD2million (continue reading