Working in mainland China
If you are employed
in Hong Kong and work in mainland China, these tips can help you.
for Individual Income Tax in China.
If all your work is done in mainland,
you are entitled to a full exemption. If you occasionally comes back to
the Hong Kong office to attend meetings or report duties, the exemption
will fall through. So, you had better report duties to your Hong Kong boss
through telephone, fax or e-mail. It is also advisable for your employment
contract to stipulate your duties in mainland only.
Press here for more.
In general, the relief under Section
8(1A)(c) of Inland Revenue Ordinance (IRO) is greater than the double
taxation relief under Section 49. In brief, the Section 8(1A)(c) relief is
to exempt the income attributable to services in mainland if mainland's
Individual Income Tax is paid on such income. So, you had better keep all
your mainland tax bills for your claim. Click
here to read my tax tips on Individual Income Tax.
for working in mainland China has been held by Board of Review as not
taxable. Press here for details.
Individual Income Tax paid by the
employer should be wholly excluded under Section 8(1A)(c).
Click here for details.
If you only work in Hong Kong during
visits not exceeding 60 days during the year of assessment, you are
entitled to a full exemption. But this exemption will not apply if your
main base of work is in Hong Kong. In counting the days for this
exemption, the Revenue takes the departure day and the arrival day
as two whole days in Hong Kong. You'd better keep record of all your stay
in Hong Kong.
If your employment is of a non-Hong
Kong source, you are entitled to claim relief under Section 8(1A)(a): that
is to exempt the income attributable to your services in mainland. In
practice, the exemption is computed on
basis: that is by reference to
the number of days in mainland over the number of total days in Hong
Kong and in mainland. From case law, whether your employment is of a
non-Hong source depends on three factors: location of
employment contract, location of employer's residence and place of payment
of remuneration. So, you should keep record of your stay in mainland as
well as the documents concerning the source of your employment.
Click here to read IRD's usual query:
Where a taxpayer
claims exemption on the ground of payment of non-Hong Kong income tax.