Living in Hong Kong is in itself an amazing experience for a variety of reasons, including its culture, tradition, quality of life, sightseeing, working opportunity, everything is just bang-on. It is the Hong Kong warm hospitality and profit-making privilege which make the land most desired destination for American expats. Surely, the country also used to be in your wish list a time back to set up an entity. But hold on….at that time do you had any idea about your liability to pay incurred US expat tax Hong Kong? No, right, but now will get complete knowledge about your tax liability.
To start with, it’s important for you to know that if you earn or get any income from any source in Hong Kong whatsoever the reason, you are likely to declare your income amount transparently to the Hong Kong tax authorities and pay tax on it. If not, get ready to bear the consequences. The approach to calculating your liability to pay tax in Hong Kong is an absolutely different concept which needs the expertise of US tax advisor Hong Kong so that you can have better guidance of taxation.
The post will help you understand your tax responsibilities as an American expatriate living in Hong Kong.
What Income Is Taxable In Hong Kong?
If you have a permanent citizenship America and set up an entity in Hong Kong, you are obligated to file US expat taxes with the federal government under the administration of Inland Revenue Ordinance (IRO). The way tax is approached in Hong Kong there is a possibility you are unfamiliar with it. There are different taxes scheduled for a different source of income. The best part is that there are various exemptions and deductions available to US citizens for paying income tax in Hong Kong which would be eligible as per the income source and amount too.
If you are new to Hong Kong tax provision system, taking the advice of American tax consulting in Hong Kong is essential.
Who is Liable to pay income tax in Hong Kong?
Any individual whether he is a citizen or resident of Hong Kong or not, if he/she earns money from any source must be declared and taxed in Hong Kong.
The only concession is if the earnings you have earned or get from Hong Kong were received during a visit of less than 60 days to Hong Kong. In this case, an individual is not liable anymore.
But the question is how do you figure out which of your income is considered ‘earn’ in Hong Kong? It’s possible to apart some ‘earnings’ straight away. Otherwise, if the following applies then the income will definitely be considered to be taxed:
- The contract of employment was negotiated, agreed and enforceable in Hong Kong.
- Employer of the signed contract resides in Hong Kong.
- Remuneration to employee paid in Hong Kong
If any of the above condition your situation or terms of contract covered, you have to declare your income to Hong Kong tax authorities. For your sake, better to seek professional HTJ Tax consultant’s advice so that you won’t catch under the category of defaulter and continue to earn proudly.
