Summary of Hong Kong 2015/16 budget

  1. Economic review
    • Recurrent expenditure has kept increasing in recent years, constituting over 90% of the operating expenditure.
    • The increasing growth of the recurrent expenditure demonstrates the HKSAR Government (“the Government”) continued commitment towards improving people’s livelihood.
    • Forecast GDP growth is between 1% and 3%.
    • Forecast headline inflation is 3.5% and underlying inflation is 3%.

     

  2. Major proposed measures (Tax Concessions and One-off Measures)

    Profits Tax

    • Reduce profits tax for 2014/15 by 75%, subject to a ceiling of HKD 20,000.

    Salaries Tax

    • Increase the basic and additional child allowances from HKD 70,000 to HKD 100,000 from 2015-16 onwards.
    • Reduce salaries tax and tax under personal assessment for 2014/15 by 75%, subject to a ceiling of HKD 20,000.

    Rate

    • Waive rates for the first two quarters of 2015/16, subject to a ceiling of HKD 2,500 per quarter, for each rateable property.

    Others

    • Provide an extra allowance to Comprehensive Social Security Assistance (CSSA) recipients, equal to two months of the standard rate CSSA payments, and an extra allowance to the recipients of Old Age Allowance, Old Age Living Allowance and Disability Allowance, equal to two months of the respective allowances; and
    • Pay 1 month's rent for lower income tenants living in the rental units of the Hong Kong Housing Authority (HKHA) and the Hong Kong Housing Society (HKHS). This measure will not apply to tenants who are required to pay additional rent to HKHA and non-elderly tenants of the HKHS Group B estates.

     

  3. Major Tax Rates For The Years 2014/15 And 2015/16
    1. Salaries Tax
      1. Personal tax allowances and deductions:
          2014/15
        HKD
        2015/16
        HKD
        Basic allowances
        Single person’s allowance 120,000 120,000
        Married person’s allowance 240,000 240,000
         
        Additional allowances :
        Child
        Basic 70,000 100,000
        Additional (in the year of birth) 70,000 100,000
         
        Dependent parent / grandparent:
        a. Aged 55 to 59
        Basic 20,000 20,000
        Additional 1 20,000 20,000
        b. Aged 60 or above
        Basic 40,000 40,000
        Additional 1 40,000 40,000
         
        Dependent brother / sister 2 33,000 33,000
         
        Single parent 120,000 120,000
         
        Disabled dependent 66,000 66,000
         
        Additional deductions :
        Self-education expenses 3 80,000 80,000
        Home loan interest 4 100,000 100,000
        Elderly residential care expenses 80,000 80,000
        Contributions to retirement schemes 17,500 18,000
        Approved charitable donations 5 35% 35%
         
        Notes
        1 For dependent living with taxpayer.
        2 For whom no child allowance is being claimed.
        3 The maximum amount that can be claimed as deductible expense for training courses attended at approved institutions.
        4 The entitlement period for tax deduction is 15 years.
        5 The maximum deduction allowable is restricted to 35% of the taxpayer’s assessable income after deduction of allowable expenses and depreciation allowance.
      2. Standard salaries tax rates:
          2014/15 and 2015/16
        Standard tax rates 15%
      3. Progressive salaries tax rates:
        Net Chargeable Income 2014/15 and 2015/16
        First HKD 40,000 2%
        Next HKD 40,000 7%
        Next HKD 40,000 12%
        Remainder 12%
    2. Profits Tax
      Business Category 2014/15 and 2015/16
      Unincorporated Business 15%
      Corporation 16.5%

    3. Property Tax
      Taxpayer 2014/15 and 2015/16
      Property Owner 15%

    4. Stamp Duty (Shares transactions)
      Particular 2014/15 and 2015/16
      Including shares, marketable securities, warrants and options registered in HK (Stamp duty on all ETFs is waived effective from 13 February 2015) 0.2%
  4. Economic outlook (Support to Small and Medium Enterprises)
    • Extend application period for special concessionary measures under Small and Medium Enterprises (“SME”) Financing Guarantee Scheme to 29 February 2016;
    • Inject HKD 1.5 billion into the SME Export Marketing and Development Funds;
    • Increase the maximum amount of funding support for each project under the SME Development Fund from HKD 2 million to HKD 5 million; and
    • Expand the scope of the SME Export Marketing Fund.

     

  5. Detailed version of our summary

    Please visit full version for detailed version of our summary on the Hong Kong 2015-16 Budget.

     

  6. Further information

    The above information is mainly extracted from the website of the “The Hong Kong 2015-16 Budget”.

    Please visit http://www.budget.gov.hk/2015/eng/speech.html;

    or Contact Us for further details.

     

 

Disclaimer
The general tax information on the above content is provided for your ease reference and is not intended to replace any tax advice or other professional advice. Clients should clearly acknowledge and confirm that final decision is reserved by Hong Kong Inland Revenue Department through its tax assessment process. In the event of any inconsistency between the English and Chinese versions of this content, the English version shall prevail.

Reference:

The 2015-16 Budget - Budget Speech

http://www.budget.gov.hk/2015/eng/speech.html
[Accessed 27 February 2015]

 

 

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