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Investment Taxation for Expats in Hong Kong

Submitted: April 2014

Income in this category includes:

  • interest from bank and building society deposits
  • interest from government and corporate stocks (bonds)
  • rental income from properties both in Hong Kong and abroad
  • dividends
  • capital gains, and
  • pensions.

Interest

Hong Kong does not tax interest income received from Hong Kong based deposits or bonds, nor does it tax interest received in Hong Kong from overseas deposits or bonds. In addition if the country of origin of interest payments has a suitable tax treaty with Hong Kong, the amount of tax that can be charged by the country of origin is generally reduced to 10%. There is a table showing tax treaty rates with different countries here .  

Rental income

Tax on rental income derived from Hong Kong properties is charged at a flat rate of 15% on 80% of the actual rental income received during any given tax year. This is called the net assessable value. Rental income received from properties situated outside Hong Kong is not taxable. Taxable rental income must be reported in your annual tax return. You can choose to be assessed at the progressive income tax rate, provided that this will reduce your overall tax liability.

Dividends

Hong Kong does not tax dividends issued by either Hong Kong or overseas companies. Overseas dividends may be taxable in the country of origin, however if the country of origin of dividends has a suitable tax treaty with Hong Kong, the amount of tax that can be charged by the country of origin is generally reduced to 10%. There is a table showing tax treaty rates with different countries here.

Capital gains

There is no tax on capital gains in Hong Kong.

Pensions

Pension payments that are Hong Kong based are liable to salaries tax, and must be reported on your tax return. There is no tax liability on pension income received from overseas.

 

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