Hong Kong’s government delivered the 2020-2021 Budget with measures for individuals and their employers including, a HKD 10,000 cash pay-out to certain Hong Kong permanent residents and a reduction of the 2019-20 salaries tax and tax under personal assessment, under certain conditions. There were no changes to salaries tax rates and allowances for individuals.
The Hong Kong government delivered the 2020-2021 Budget, which included a series of relief measures in response to the challenging economic environment and escalating coronavirus (COVID-19) outbreak.1
In this GMS Flash Alert we highlight some of the key tax measures announced impacting individuals and their employers.
For a full analysis of the Budget, see “Hong Kong Budget Summary 2020-2021,” a publication of the KPMG International member firm in Hong Kong. Also visit the Hong Kong member firm’s dedicated Budget webpage.
The proposed relief measures for 2020-21 and the tax reduction for 2019-20 will potentially reduce the tax payable by employees in Hong Kong. This could mean lower international assignment costs for employers. The proposals may necessitate adjustments to tax equalisation and tax protection calculations, once they come into effect.
In view of the COVID-19 outbreak, the measures will also provide taxpayers some relief in trying times.
In the Hong Kong Budget 2020-2021, the government projected a rising underlying inflation rate and unemployment rate. Key proposals affecting individuals and their employers include:
The Budget focuses on providing relief to support not only individuals, but also enterprises and businesses, while the HKD 10,000 cash payment and tax relief measures are aimed at boosting domestic consumption demand and stimulating the economy.
Legislative proposals do not generally become law until their enactment and may be modified before enactment.
1 For the text of the budget speech (in Mandarin/Chinese and English), and related documentation and videos, see: https://www.budget.gov.hk/2020/chi/index.html .
HKD 1 = EUR 0.1185
HKD 1 = USD 0.129
HKD 1 = GBP 0.104
HKD 1 = AUD 0.213
The information contained in this newsletter was submitted by the KPMG International member firm in Hong Kong.
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