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Taxation of International Executives: Hong Kong


Taxation of International Executives: Hong Kong
Taxation of International Executives: Hong Kong


Hong Kong has a territorial tax system, which means that only income arising in or derived from Hong Kong is subject to tax. This means that international executives who are resident in Hong Kong are only taxed on their Hong Kong-sourced income, such as employment income, business profits, and rental income.


There are a few exceptions to the territorial tax system. For example, if an international executive exercises share options that were granted to them while they were resident in Hong Kong, the gain on the exercise of the options will be taxed in Hong Kong, even if the shares are not listed on a Hong Kong stock exchange.


The tax rates in Hong Kong are relatively low. The top marginal rate for salaries tax is 17%, and the top marginal rate for profits tax is 16.5%. There are also a number of deductions and allowances that can be claimed, which can further reduce an individual's tax liability.


Hong Kong has a number of tax treaties with other countries, which can provide relief from double taxation. This means that if an international executive is resident in Hong Kong and also pays tax in their home country on the same income, they may be able to claim a credit for the tax they have already paid in their home country.


Overall, the taxation of international executives in Hong Kong is relatively straightforward and favorable. The territorial tax system means that only Hong Kong-sourced income is taxed, and the tax rates are relatively low. There are also a number of tax treaties with other countries that can provide relief from double taxation.


Here are some additional things to keep in mind about the taxation of international executives in Hong Kong:

  • The 60-day rule: If an international executive is physically present in Hong Kong for more than 60 days in a year, they will be liable to salaries tax on all of their employment income, regardless of where the services are rendered.

  • The residence test: The residence test for Hong Kong tax purposes is based on a number of factors, including the length of time an individual spends in Hong Kong, their intention to stay in Hong Kong permanently, and their ties to other countries.

  • Tax planning: There are a number of tax planning strategies that can be used to reduce an international executive's tax liability in Hong Kong. These strategies should be considered on a case-by-case basis, taking into account the individual's specific circumstances.


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If you are an international executive who is considering moving to Hong Kong, it is important to speak to a tax advisor to discuss your individual circumstances and how the taxation of international executives in Hong Kong may affect you. Contact us!




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