What are the proposed changes to taxation in Hong Kong for 2007/2008

08/03/07

The Hong Kong Budget was presented to the Legislative Council on 28 February 2007 and these were the proposed these changes.
 
Salaries Tax
The marginal tax rates and tax bands are restored to the 2002/2003 levels of 2%, 7%, 12% and 17%, with bands at $35,000 each. Basic and married person’s allowances remain at $100,000 and $200,000 respectively. Child allowance has been increased from $40,000 to $50,000 per child, and an additional one-off child allowance of $50,000 for each child will be offered in the year of birth. The maximum amount of deduction for self-education expenses has been increased from $40,000 to $60,000 per year. The government has decided to wave 50% of salaries tax and tax under personal assessment for 2006/2007, subject to a ceiling of $15,000, which would be deducted from the taxpayers’ final tax payable for the year.

Government Duties and Charges
The government reduced alcohol duties on wine to 40% and on beer and other liquor with the alcohol content of less than 30% to 20%. Stamp duty on transactions of properties worth between $1 million and $2 million has been cut from 0.75% of the property value to a fixed amount of $100. However, tobacco duties, fuel duties, betting duties, hotel accommodation tax and stamp duty on Hong Kong stocks remain unchanged.
 
Profit Tax
The profit tax rates remain at 17.5% for companies and 16% for unincorporated businesses in 2007/2008.

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