The Financial Secretary proposed to implement a two-tiered standard rates regime for salaries tax and tax under personal assessment starting from the year of assessment 2024/25.
Currently, salaries tax in Hong Kong is calculated at progressive rates from 2 per cent to 17 per cent on taxpayers net chargeable income or at a standard rate of 15 per cent on net income, whichever is lower. The standard rate is normally adopted for high earners.
In calculating the amount of tax for taxpayers whose net income (before deduction of allowances) exceeds $5 million and whose salaries tax or tax under personal assessment is to be charged at a standard rate, the first $5 million of their net income will continue to be subject to the standard rate of 15% while the portion of their net income exceeding $5 million will be subject to the standard rate of 16%.
The new regime is expected to affect 12,000 taxpayers, or just 0.6 per cent, and predicted that the move would raise HK$910 million per year for the government.
Source: ird.gov.hk