What to know about filing tax returns in 2023: When to file? Calculation of Salaries Tax? Allowances / Deductions
Tax filing season is here again, and every wage earner may have to face the tax bill sent by the Inland Revenue Department (IRD), which is commonly known as the “Green Bomb”.
The first thing you need to do is to get your hands on some of the most popular products and services available in the market.
In every year of assessment, that is, the 12-month period from April 1 each year to March 31 next year, all the actual income may be subject to salaries tax. Assuming that you start working on a certain date in the year of assessment, you should file your salaries tax return based on your income from that date to March 31 next year.
The actual taxpayers will have to pay the first installment in January and the second installment in April,louis vuitton outlet.
The first installment is due in January, and the second installment is due in April. 2023 Tax Returns丨Not Received?
If you haven’t received your 2022/23 tax return, you can check with the Inland Revenue Department:
Call 187 8022 and ask if the tax return for that year has been issued;
Visit our Central Enquiry Unit on the ground floor of the Inland Revenue Centre, 5 Co-ordinating Road, Kai Tak, Kowloon, Hong Kong during office hours to obtain a copy of the tax return in person.
Log on to the “Tax Position” section of your eTAX account for 24/7 enquiry to check if there are still outstanding tax returns.
2023 Tax Returns丨Extension of Tax Payment Deadline?
Citizens who have received their tax returns must file them on or before June 2nd. However, those who are running a sole proprietorship business have a longer filing deadline, i.e. to file their tax return on or before August 2nd. If you choose to file your tax return online, you will automatically receive a one-month extension. The deadline for the general public will be extended to July 3, while the deadline for sole proprietors will be extended to September 2.
2023 Tax Return 丨How to Calculate Salaries Tax?
The calculation of salaries tax is very simple. In the year of assessment, income is calculated in two ways, whichever is lower.
1) Real amount of taxable income: Gross income – Gross deductions – Gross allowances
2) Net Income: Gross Income – Deductions
2023 Tax Returns丨How much annual salary is subject to salaries tax?
As long as your annual salary/income for the year of assessment does not exceed the basic allowance of HK$132,000, you basically do not need to pay tax. However, if you still receive a tax return from the Inland Revenue Department, you still need to fill in the information and return it on time to notify your income.
2023 Tax Returns丨Tax Allowances
The following are the tax allowances calculated by the Inland Revenue Department for the year 2023/24:
Basic Allowance $132,000
Married Person’s Allowance $264,000
Single Parent Allowance $132,000
Disabled Person’s Allowance $75,000
Disabled Dependant’s Allowance (per person) $75,000
Child Allowance: 1st to 9th child (per child) $130,000
An additional $130,000 is added to the child allowance for the year of assessment in which each child is born.
Dependent Parent and Dependent Grandparent Allowances (per child):
(1) Parents/grandparents aged 60 or above or eligible to claim an allowance under the Government’s Disability Allowance Scheme $50,000
(2) Parent/grandparent aged 55 or above but below 60 $25,000
Additional Dependent Parent and Dependent Grandparent Allowances:
(1) Parent/grandparent aged 60 or above or eligible to claim an allowance under the Government’s Disability Allowance Scheme $50,000
(2) Parent/grandparent aged 55 or above but below 60 $25,000
Dependent Brother/Sister Allowance (per person) $37,500
2023 Tax Return 丨 Deductions
The following are the deductions and maximum deductions for the year 2023/24:
Expenses for self-education $100,000
Elderly residential care expenses $100,000
Home loan interest $100,000
Mandatory contributions to recognized retirement schemes $18,000
Eligible premiums paid under the Voluntary Health Insurance Scheme policy (per insured person) $8,000
Eligible annuity premiums and tax deductible MPF voluntary contributions $60,000
Residential Rent Deduction $100,000
Approved Charitable Donation 35%
2023 Tax Return丨If you are a first-time taxpayer?
If you are a first-time entrant to the society and join a company as an employee, since the Inland Revenue Department will set up a file for you beforehand before you can process your tax return, the tax return for first-time filing is usually not sent out on a fixed date.
2023 Tax Returns丨Part time, no income, no receipt of tax return, and still have to file a tax return?
Even if you are not a full-time employee, you need to file a tax return, whether you are a part-time, freelance, or self-employed person who earns income by running a business, buying and selling goods, or providing professional or personal services.
In the year of assessment, taxable income includes salaries, allowances and bonuses. If your annual income is below the basic allowance of HK$132,000, or if your projected income does not exceed the allowance, you will need to file a tax return if you receive one.
If you do not receive a tax return, and you often need to file a tax return in previous years, it is your responsibility to contact the Inland Revenue Department (IRD) within 4 months after the end of the year of assessment to make enquiries, either by phone or in person, and to obtain a copy of the tax return, or you can use the online “eTax” service to make enquiries, and to review all tax and tax return matters.
2023 Tax Returns｜Missing a tax return? Or want to amend your tax return?
As required by the Inland Revenue Department (IRD), you can contact the Commissioner of Inland Revenue (the Commissioner) by submitting a signed copy of the notice. When writing this notice, please be sure to include the following important information: your name, file number, the relevant year of assessment, and details of the items that need to be corrected or supplemented to facilitate the prompt processing of the amended tax return.
2023 Tax Returns丨What are the consequences of omitting to file a tax return or submitting a tax return late?
According to the Hong Kong Inland Revenue Ordinance, taxpayers should fulfill their responsibility to complete their tax returns correctly and submit them to the Inland Revenue Department (IRD) in a timely manner to facilitate accurate tax assessment.
At the same time, in order to combat all acts of deliberate tax evasion or assisting others to evade tax, the IRD can prosecute taxpayers in accordance with sections 80 and 82 of the Inland Revenue Ordinance if they are found to have omitted to file tax returns or are suspected to have evaded tax.
In the case of late filing of tax returns, the most serious penalty is a fine of HK$10,000 and prosecution. Moreover, the Inland Revenue Department (IRD) is unable to receive the “Allowances” and “Deductions” returns, which in effect means that taxpayers are only entitled to the “Basic Allowance” and are no longer entitled to the tax deductions for MPF contributions, recognized charitable donations, self-education expenses, and so on.
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Filing Tax Returns (2023)
“Filing a tax return is an annual tax obligation for all taxpayers. Whether you are a full-time employee, part-time, freelancer or self-employed, as long as you have earned income in the year of assessment, you are required to file a tax return and return it to the Inland Revenue Department (IRD) on time. The year of assessment is from April 1 of each year to March 31 of the following year. In Hong Kong, if your annual salary/income does not exceed the basic allowance of HK$132,000, you basically do not need to pay tax. However, even if your income is below the allowance, you are required to inform the Inland Revenue Department (IRD) of your income status by faithfully completing and submitting a tax return issued by the IRD. For first-time taxpayers, employers are required to submit the relevant forms to the IRD within 3 months of the new employee’s commencement of employment and send the tax return to the employee within 5 months. Professional accounting firms, such as Mexus, can provide professional accounting and tax preparation services to help taxpayers deal with various tax issues.
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