2. Property Tax

2. Property Tax - BUSI0018 HK Taxation Tutorial Notes on...

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BUSI0018 – HK Taxation Tutorial Notes on Property Tax Charging Section s5(1) Property Tax shall be charged on person being the owner of any land and/or buildings situated in HK . implying the citizenship of the owner is irrelevant e.g. if the owner of a HK residential property is a German, he/she is still liable to pay the Property Tax. No property tax is charged on the owner if he/she does not earn any rental income from the property i.e. if the property is purchased for residential use , the owner will not subject to any property tax. Income from sub-letting (分分) of a property by the principal tenant/sub-tenant is NOT chargeable to property tax because the recipient of the rental income is not the owner. e.g. Mr. A lets the property to Mr. B sublets the property to Mr. C (owner) (principal tenant) (sub-tenant) So, who is liable to pay property tax in this case? should be Mr. A (but not Mr. B) because Mr. A is the owner. However, letting or sub-letting of a property by a corporation (not a person) the income received from sub-letting is subject to profits tax even though it’s not subject to property tax. The amount of property tax is calculated as follows: Net Assessable Value 應應應應應 x standard tax rate 15%* Net assessable value = Assessable Value – Rates 分分 paid by the owner – 20% statutory deduction 分分分分分 on the assessable value after rates deduction
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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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2. Property Tax - BUSI0018 HK Taxation Tutorial Notes on...

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