The Inland Revenue Department of the Hong Kong Special Administrative Region of the People's Republic of China has released its proposed 2022-2023 budget. Among other things, the budget proposed by the Region's Financial Secretary includes a one-time reduction of salaries (personal income) tax and profits (business income) tax for the 2021-22 assessment year by 100%, up to HK$10,000 per case. The measure requires amendment of the Region's Inland Revenue Ordinance.
For the salaries tax, the ceiling is applied to each individual taxpayer; however, for married couples jointly assessed, the ceiling is applied to each married couple (i.e., capped at HK$10,000 in total).
The ceiling on the profits tax will be applied to each business. A taxpayer separately liable for the salaries tax and profits tax will be eligible for tax reduction under each of the tax types. Additionally, the Financial Secretary has proposed waiving business registration fees for 2022-23.
The Inland Revenue Department advises taxpayers to file their profits returns and returns for individuals for the 2021-22 assessment year as usual. Once implementing legislation is enacted, the Department will reduce the final assessment. Taxpayers are not required to make any applications or inquiries to the Department.
Edward Kowalski, Esq., is Manager, Payroll Information Resources, for the American Payroll Association.