Insights

2014/15 Hong Kong SAR Budget Highlights

Summary of allowances, deductions & tax rates

Highlights of the Budget’s major proposed changes

  • Tax Rebates
    • A 75% profits tax rebate, capped at HK$10,000 for the year of assessment 2013/14 final tax payable
    • A 75% salaries tax and tax under personal assessment rebate, capped at HK$10,000 for the year of assessment 2013/14 final tax payable
  • An increase of approximately 5% to the following allowances and deductions (see table below):
    • Dependent parent and grandparent allowances;
    • Deduction ceiling for elderly residential care expenses.
  • Extending the exemption of First Registration Tax on electric vehicles to 31 March 2017;
  • Increase the duty on cigarettes by 20 cents per stick;
  • Waive the stamp duty for the trading of all exchange traded funds;
  • Others
    • Waive the rates for the first two quarters of 2014/15, subject to a cap of HK$1,500 per quarter for each rateable property;
    • Paying one month base rent for public housing tenants and two-thirds of rent for one month for the non-elderly tenants of the Hong Kong Housing Society's Group B estates;
    • Providing an extra allowance to Comprehensive Social Security Assistance (CSSA) recipients, equal to one month of the standard rate CSSA payments, and an extra allowance to Old Age Allowance, Old Age Living Allowance and Disability Allowance recipients, equal to one month of the allowances;
    • Increasing the annual voucher value under the Elderly Health Care Voucher Scheme to HK$2,000 per person;
    • Issue of iBond of up to HK$10 billion with a maturity of three years, with interest payable to bond holders once every six months at a rate linked to the inflation rates of the last half-year period;
    • Review the requirements under the Inland Revenue Ordinance for interest deductions in the taxation of corporate treasury activities, and clarify the criteria for such deductions.

Salaries Tax

Progressive Tax Rates (Remain unchanged)

2013/14 and 2014/15

Net chargeable income

Marginal tax rate

First HK$40,000

2%

Next HK$40,000

7%

Next HK$40,000

12%

Remainder

17%

 

Standard Rate (Remain unchanged)

2013/14 and 2014/15

15%

 

Allowances and Deductions

 

2013/14 (HK$)

2014/15 (HK$)1

Personal Allowances:

 

 

    Basic

120,000

120,000

    Married

240,000

240,000

Single parent

120,000

120,000

Child:

 

 

    1st to 9th child

 

 

Year of birth

140,000

140,000

Other years

70,000

70,000

Dependent parent/grandparent (aged 60 or above):

 

 

    Basic

38,000

40,000

    Additional allowance
    (for each dependant living with taxpayer)

38,000

40,000

Dependent parent/grandparent (aged between 55-59):

 

 

    Basic

19,000

20,000

    Additional allowance
    (for each dependant living with taxpayer)

19,000

20,000

Dependent brother/sister

33,000

33,000

Disabled dependant

66,000

66,000

 

 

 

Deductions (maximum amount):

 

 

Self-education expenses

80,000

80,000

Home loan interest

100,000
(15 years of assessment)

100,000
(15 years of assessment)

Elderly residential care expenses

76,000

80,000

Contributions to recognised retirement schemes

15,000

17,500

Approved charitable donations

35% of income

35% of income

 

One-off Measure on Salaries Tax and Tax under Personal Assessment

Reduction of 75% of final tax payable under Salaries Tax and Tax under Personal Assessment for 2013/14, subject to a ceiling of HK$10,000, is proposed.1

Profits Tax (Remain unchanged)

 

2013/14 and 2014/15

 

Tax rate

Incorporated

16.5%

Unincorporated

15%

 

One-off Measure on Profits Tax1

Reduction of 75% of final tax payable under Profits Tax for 2013/14, subject to a ceiling of HK$10,000 is proposed.

Property Tax (Remain unchanged)

2013/14 and 2014/15

Tax rate

15%

 

Rates1

The Budget would waive rates for first two quarters of 2014/15, subject to a ceiling of HK$1,500 per quarter for each rateable tenement.

1. Legislative amendments are required.

Did you find this useful?

Related topics