Salaries Tax

i. Personal tax allowances and deductions

	2015/16 HKD	2016/17 HKD
Basic allowances
Single person’s allowance	120,000	132,000
Married person’s allowance	240,000	264,000
Additional allowances
Child
Basic	100,000	100,000
Additional (in the year of birth)	100,000	100,000
Dependent parent / grandparent
a. Aged 55 to 59
Basic	20,000	23,000
Additional 1	20,000	23,000
b. Aged 60 or above
Basic	40,000	46,000
Additional	40,000	46,000
Dependent brother / sister 2	33,000	33,000
Single parent	120,000	120,000
Disabled dependent	66,000	66,000
Additional deductions
Self-education expenses 3	80,000	80,000
Home loan interest 4	100,000	100,000
Elderly residential care expenses	80,000	92,000
Contributions to retirement schemes	18,000	18,000
Approved charitable donations 5	35%	35%
Notes
1 For dependent living with taxpayer.
2 For whom no child allowance is being claimed.
3 The maximum amount that can be claimed as deductible expense for training courses attended at approved institutions.
4 The entitlement period for tax deduction is 15 years.
5 The maximum deduction allowable is restricted to 35% of the taxpayer’s assessable income after deduction of allowable expenses and depreciation allowance.

 

ii. Standard salaries tax rates

	2015/16 and 2016/17
Standard tax rates	15%

 

iii. Progressive salaries tax rates

Net Chargeable Income		2015/16 and 2016/17
First	HKD 40,000	2%
Next	HKD 40,000	7%
Next	HKD 40,000	12%
Remainder		17%

 

Profits Tax

Business Category	2015/16 and 2016/17
Unincorporated Business	15%
Corporation	16.5%

 

Property Tax

Taxpayer	2015/16 and 2016/17
Property Owner	15%

 

Stamp Duty

i. Shares transactions

Particular	2015/16 and 2016/17
Contract Note for sale or purchase of any Hong Kong stock	0.1% of the amount of the consideration or of its value on every sold note and every bought note
Transfer operating as a voluntary disposition inter vivos	HKD 5 + 0.2% of the value of the stock
Transfer of any other kind	HKD 5

 

ii. Property transactions

Sales Consideration	2015/16 and 2016/17
Up to HKD 2,000,000	1.5%
HKD 2,000,001 to HKD 2,176,470	HKD 30,000 + 20% of excess over HKD 2M
HKD 2,176,471 to HKD 3,000,000	3%
HKD 3,000,001 to HKD 3,290,330	HKD 90,000 + 20% of excess over HKD 3M
HKD 3,290,331 to HKD 4,000,000	4.5%
HKD 4,000,001 to HKD 4,428,580	HKD 180,000 + 20% of excess over HKD 4M
HKD 4,428,581 to HKD 6,000,000	6%
HKD 6,000,001 to HKD 6,720,000	HKD 360,000 + 20% of excess over HKD 6M
HKD 6,720,001 to HKD 20,000,000	7.5%
HKD 20,000,001 to HKD 21,739,130	HKD 1,500,000 + 20% of excess over HKD 20M
Exceeding HKD 21,739,130	8.5%

On top of the current ad valorem property transaction stamp duty (maximum at 4.5%), a Special Stamp Duty (“SSD”) is imposed on residential properties of all values at the point of resale if the properties are acquired on or after 20 November 2010 and resold within 24 months after acquisition.

In October 2012, the Government announced to adjust the SSD rates and extend the coverage period to 36 months for any residential properties acquired on or after 27 October 2012. Transactions took place between 20 November 2010 and 26 October 2012 are subject to the original SSD regime.

The prevailing SSD will have three levels of regressive rates for different holding periods:

1. 20% if the property has been held for six months or less;
2. 15% if the property has been held for more than six months but for 12 months or less; and
3. 10% if the property has been held for more than 12 months but for 36 months or less.

In addition to SSD, a Buyer’s Stamp Duty (“BSD”) on residential properties acquired by any person (including a company incorporated) except a Hong Kong Permanent Resident is effected from 27 October 2012. BSD is to be charged at a flat rate of 15% on all residential properties, on top of the existing stamp duty and the special stamp duty, if applicable.

On 22 February 2013, the Financial Secretary announced that the Government would amend the Stamp Duty Ordinance to adjust the ad valorem stamp duty (“AVD”) rates and to advance the charging of AVD on non-residential property transactions from the conveyance on sale to the agreement for sale. Under the Government’s proposed amendments, any residential property (except that acquired by a Hong Kong Permanent Resident who does not own any other residential property in Hong Kong at the time of acquisition) and non-residential property acquired on or after 23 February 2013, either by an individual or a company, will be subject to the new rates of AVD. Transactions which took place before 23 February 2013 will be subject to the original stamp duty regime.

 

iii. Leases

Leasing period	2015/16 and 2016/17
Not defined or is uncertain	0.25%
Specified in the lease as not exceeding 1 year	0.25%
Exceeding 1 year but not exceeding 3 years	0.5%
Exceeding 3 years	1%

 

Estate Duty

The Government had abolished the Estate Duty with effect from 11 February 2006 pursuant to the Revenue (Abolition of Estate Duty) Ordinance 2005.