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2017/18 Hong Kong Budget Summary - Proposed tax concessions & one-off relief measures 2017-02-22

2017/18 Hong Kong Budget Summary - Proposed tax concessions & one-off relief measures


·Tax Rebates

ØReduce 75% of final tax payable under Profits Tax, Salaries Tax and tax under Personal Assessment for 2016/17, subject to a ceiling of HK$20,000

·Widen the marginal bands for Salaries Tax from the current $40,000 to $45,000.

·Increase the disabled dependent allowance to HK$75,000

·Increase the dependent brother/sister allowance to HK$37,500

·Extend the entitlement period for the tax reduction for home loan interest to 20 years of assessment

·Raise the deduction ceiling for self-education expenses to $100,000.

·Others

ØWaive the rates for all quarters of 2017/18, subject to a celling of HK$1,000 per quarter for each rateable property;

ØProvidean extra allowance to Comprehensive Social Security Assistance (“CSSA”) recipients, equal to one month of the Standard rate CSSA payments, and an extra allowance to the Old Age Allowance, Old Age Living Allowance and Disability Allowance recipients, equal to one month of the respective allowances;

ØContinue to waive the First Registration Tax of electric commercial vehicles, motor cycles and motor tricycles for 2017/18, subject to a ceiling of HK$97,500; and

ØPropose to provide tax deduction for the purchase of regulated health insurance products.

Appendix – Summary of Allowances, Deductions & Tax Rates


·Salaries Tax

ØProgressive Tax Rates

2016/17

2017/18

Net chargeable income (HK$)

Marginal tax rate

Net chargeable income (HK$)[1]

Marginal tax rate

First HK$40,000

2%

First HK$45,0001

2%

Next HK$40,000

7%

Next HK$45,0001

7%

Next HK$40,000

12%

Next HK$45,0001

12%

Remainder

17%

Remainder

17%

ØStandard Rate (Unchanged)

2016/17& 2017/18

15%

ØAllowances and Deductions

2016/17

(HK$)

2017/18

(HK$)

Personal Allowances

Basic

132,000

132,000

Married

264,000

264,000

Single parent

132,000

132,000

Child:

1stto 9thchild (each)

Year of birth

200,000

200,000

Other years

100,000

100,000

Dependent Parent/Grandparent (aged 60 or above):

Basic

46,000

46,000

Additional allowance

(for each dependent living with taxpayer)

46,000

46,000

Dependent Parent/Grandparent (aged between 55-59):

Basic

23,000

23,000

Additional allowance

(for each dependent living with taxpayer)

23,000

23,000


Dependent Brother/Sister

33,000

37,500

Disabled Dependent

66,000

75,000


Deductions (maximum amount):

Self-education expenses

80,000

100,000

Home loan interest

100,000

(15 years of assessment)

100,000
(
20 years of assessment) 2

Elderly residential care expenses

92,000

92,000

Contributions to recognized retirement schemes

18,000

18,000

Approved charitable donations

35% of income

35% of income

ØOne-off Measure on Salaries Tax and Tax under Personal Assessment2

-Reduction of 75% of final tax payable under Salaries Tax and Tax under Personal Assessment for 2016/17, subject to a ceiling of HK$20,000, is proposed.


·Profits Tax

ØStandard Tax Rate (Unchanged)

2016/17& 2017/18

Incorporated

16.5%

Unincorporated

15%

ØOne-off Measure on Profits Tax

-Reduction of 75% of final tax payable under Profits Tax for 2016/17, subject to a ceiling of HK$20,000, is proposed.


·Property Tax

ØStandard Rate (Unchanged)

2016/17& 2017/18

15%

·Rates

ØThe Budget would waive rates for all quarters of 2017/18, subject to a ceiling of HK$1,000 per quarter for each rateable property.

·First Registration Tax for Electric Vehicles

ØThe Budget would continue to waive the First Registration Tax of electric commercial vehicles, motor cycles and motor tricycles for 2017/18, subject to a ceiling of HK$97,500.