1. Tax Admin

1. Tax Admin - BUSI0018 Hong Kong Taxation 2010-2011 2nd...

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BUSI0018 Hong Kong Taxation 2010-2011 2 nd Semester Tutorial One Definition of Taxation Tax is a compulsory levy made by the government for which nothing is received directly in return. It is the major source of income of the government of the Hong Kong Special Administrative Region. Classification of Taxes 1. Direct/Indirect Taxes – whether the taxes are directly assessed on and collected from organizations/individuals who are intended to bear it. 2. Classified by tax bases - taxes on income : a. profits tax – charged on business profits (2009/2010: 16.5% for corporations and 15% for others like sole proprietors) b. salaries tax – charged on employment and office income (2009/2010: basically on progressive basis from 2% to 17% ; i.e. first $40,000: 2%, second $40,000: 7%; third $40,000: 12%; above 120,000: 17%) c. property taxes – charged on property rental income (2009/2010: standard tax rate – 15%) - taxes on wealth : estate duty [abolished under the Revenue (Abolition of Estate Duty) Ordinance 2005]. That means, the estate duty is no longer applied to persons who died after Feb 10, 2006. 1 Types of Taxes Direct Taxes: - which are assessed directly on organizations/individuals - examples: 1. salaries tax 2. property tax and 3. profits tax Indirect Taxes: - which are passed on to final customers - examples: 1. betting duty 2. stamp duty 3. hotel accommodation tax 4. customs and excise duty
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- Taxes on documents/instruments : stamp duty 印印印 Most of the Hong Kong stamp duty is generated from documents relating to purchase and sale of immovable property in Hong Kong , the leasing of immovable property in Hong Kong, and the purchase and sale of HK stock e.g. agreements for the purchase and sale of immovable residential property in Hong Kong Stamp duty varies with the value of the property. For instance, if the value of the property is not more than $2,000,000 , the stamp duty is only $100 . If the value of the property is above $6,720,000 , the stamp duty is 3.75% of the value (consideration 印印) of the property. (Note: Special Stamp Duty is imposed if a person acquires a residential property on or after 20 November 2010 and disposes of it within 24 months from the date of acquisition. SSD is calculated based on the market value of the property at the following rates depending on the duration of the holding period: a. holding period: 6 months or less: 15% b. holding period: more than 6 months but for 12 months or less: 10% c. holding period: more than 12 months but or 24 months or less: 5%) e.g. instruments for the sale and purchase of Hong Kong stock Stamp duty is 0.1% (2002/03 to 2010/2011) of the value of the transfer e.g. instruments for the lease of immovable property in Hong Kong The rate of stamp duty on lease increases with the lease period.
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This note was uploaded on 02/23/2012 for the course BUSI 0018 taught by Professor C.ng during the Spring '11 term at HKU.

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1. Tax Admin - BUSI0018 Hong Kong Taxation 2010-2011 2nd...

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