7/26/2021 0 Comments Hong Kong TaxationUnder Article108 of the Basic Law of Hong Kong, the taxation system in Hong Kong is separate from, and distinct from, the tax system in mainland China. The Basic Law also sets out the system of taxation in Hong Kong for both local people and companies. The legislature of Hong Kong must approve all laws relating to taxation before they become part of the Basic Law. The legislature normally consists of an assembly or a commission, each of which is elected for a four-year term. The chairperson of the legislature is usually a non-party member of the House of Representatives or of the Council momentary. Click here hktax for more details on this topic. Hong Kong taxation is generally based on a tax system that is based on land use fees, including taxes for improvements to roads, public utilities and housing and personal belongings. The Personal Income Tax includes all incomes not exceeding a prescribed limit, inclusive of income from interest and dividends and capital gains from sources outside the personal possessions of the person who earned the income. The highest rate of income tax is 33% for taxable incomes above a fixed limit. A few other taxes in Hong Kong include property taxes, import duties, local taxes, inheritance taxes, corporate taxes and stamp duties. The hong kong tax system has two main channels of taxation: individual taxes and company taxes. The type of tax determines the amount of tax payable. For instance, a Hong Kong salary tax for corporate-level employees will be different from that of personal wages. The Hong Kong income tax system also incorporates an "inland revenue" tax, which is charged under the powers of the customs and Excise Department. There are two main types of taxation in Hong Kong: general taxes and service taxes. General taxes are collected by the Hong Kong central government and forwarded to the different local bodies for payment. These include the Excise Department for general public functions like stamp duty and local taxes. Service tax, on the other hand, is a percentage of the gross salary of an employee and is collected by the employer. Service tax is one of the lowest levied taxes in the world, with only Japan and Singapore imposing higher rates. Hong Kong's tax regime is administered under the supervision of its taxation and customs administration. Hong Kong's colonial government introduced a series of tax amendments in 1950, including the provision of a local income tax. Among these tax amendments is the Tax Administration Ordinance, or TAO. This is the body that supervises the implementation of Hong Kong's tax legislation, including the Hong Kong Income Office or HOGA, and collects and disburses the taxes listed in the TAO. Hong Kong's taxation system is highly progressive. The statutory tax rate is 33% for corporate and unincorporated persons and a national rate of 15% on salaries and other salaries or benefits of employees. The Hong Kong government also has a taxation system that is based on a dual taxation system. The central government and the local governments levy taxes on property, income, value-added services, inheritances and other tangible assets. A number of companies and individuals have realized substantial savings through incorporating themselves in Hong Kong. Many businesses conduct business through a number of offshore entities to minimize their taxation exposure. Find out more details in relation to this topic here: https://www.encyclopedia.com/social-sciences-and-law/economics-business-and-labor/taxation/income-tax.
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