Taxpayers are always searching for ways to reduce their tax liability. Here are some ways to reduce Hong Kong tax liability on your individual income tax return:
- Claim for deductions under salaries tax (i.e., outgoing and expenses, self-education expenses, approved charitable donations and contributions to the Mandatory Provident Fund (“MPF”) or Recognized Occupational Retirement Scheme).
- Opening a tax deductible MPF voluntary contribution account (aka TVC). This could help taxpayer to claim an additional HKD 60,000** on their Hong Kong salaries tax return besides the mandatory MPF contribution deduction of HKD 18,000**.
- Deduction for qualifying premiums paid under Voluntary Health Insurance Scheme Policy and Qualifying Deferred Annuity Policy are also ways to reduce the assessable income for Hong Kong salaries tax purpose.However, the deduction allowable to the taxpayer should not exceed the aggregate of qualifying annuity premiums and deductible MPF voluntary contributions actually paid; or the specified maximum deduction of $60,000, whichever is lower.
- Tax deduction of domestic rental expenses, for more details with examples please refer HERE. In general, the maximum amount of deduction allowable to a taxpayer is $100,000 for each year of assessment.
- Other concessionary deductions such as elderly residential care expenses and home loan interest on qualifying dwelling, if applicable.
- If married, assess the benefits of filing a joint assessment if your spouse’s earning is less than the basic allowance. This could be done by using an online tax calculator, please be sure to use correct tax period.
** These are amounts allowed for deduction under current tax legislation and are subject to change over the coming years.
Disclaimer: This information has been prepared for informational purposes only, and is not
intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors or consult us regarding your own personal tax situation as this article was intended to be general in nature.