to work in Shanghai - 06/03/00
Question
I plan to work in Shanghai, my new salary will be HKD 800000, + 15% oversea allowance, 20% year end bonus, where should I declare for income tax, China or HK, in order to minimize the income tax? or if the company can arrange so that part of my salary paid in HK, and part paid in Shanghai, is it better to pay in both place?
Answer
1) You have to clarify whether your employment is a HK employment or foreign employment. For a HK employment, all income would be taxable even though you have rendered some services outside Hong Kong. For a foreign employment, only income derived from services rendered in Hong Kong is taxable.
2) If you can prove that you visit Hong Kong for not more than 60 days during the year, you will be exempted from Salaries Tax under S.8(1B).
3) If your employment is a HK employment and you also rendered services outside Hong Kong, you can have part of your income exempt under S.8(1A)(c). You have to submit documents to prove that part of your income has been subject to tax in the territory where the services are rendered and such foreign tax has been paid.