Filing taxes in Hong Kong may feel overwhelming, but with a clear understanding of the tax system and a few key tips you can make the process much simpler. This guide will walk you through the basics of Hong Kong’s income tax system, common deductions, and step-by-step instructions on how to file your taxes with confidence.

Understanding the Basic Income Tax System in Hong Kong

Hong Kong uses a territorial tax system, meaning you're only taxed on income earned within the city. For most expats and employees, the main tax you’ll need to deal with is Salaries Tax. Due to the progressive tax rate you'll only pay the particular tax rate on every part of your salary.

Progressive Tax Rates for 2025

Possible Deductions and Allowances

Hong Kong provides a variety of personal allowances and deductions to reduce your tax burden. Here's a breakdown of common types:

Deductions:

1. Mandatory Provident Fund (MPF) Contributions 

  Employees can claim up to HK$18,000 per year for MPF contributions.

2. Charitable Donations 

  Donations to approved charities are eligible for deduction. The amount must exceed HK$100.

3. Self-Education Expenses 

  You can claim up to HK$100,000 per year for courses that improve your professional skills.

4. Home Loan Interest 

  Homeowners can deduct interest paid on their mortgage, capped at HK$100,000 per year for 20 years.

5. Expenses for Rent 

  If you are renting a property in Hong Kong, you may claim up to HK$100,000 in deductions, subject to conditions.

Important Notes

• Ensure you keep all receipts and documentation for deductions.

• Late filing can incur penalties, so mark those deadlines!

How to File Taxes in Hong Kong

Filing taxes in Hong Kong is a straightforward process if you follow these essential steps:

1. Know Your Filing Deadline 

The Hong Kong Inland Revenue Department (IRD) issues tax returns annually in early April. Salaries Tax returns are generally due within 1 month from the date of issue.

2. Gather Required Documents 

Start by collecting these essential items:

• Employer’s Return (Form IR56B)

• Rental agreements (if claiming rent deduction)

• Proof of MPF contributions

• Receipts for deductible expenses (self-education, donations, etc.)

3. Complete Your Tax Return 

The primary tax return form for individuals is BIR60. You can complete it online or manually. Use the online eTax system via the IRD website for a faster and more streamlined experience.

4. File Your Tax Return 

Once completed, submit your tax return either:

• Online via the eTax portal (recommended)

• By mailing the completed BIR60 form to the IRD office.

5. Pay Taxes 

You will receive a notice of assessment detailing the amount owed. Payment options include:

• Online banking

• ATM

• By cheque or cashier’s order

• Direct payment via eTax

Tip: Pay by the due date to avoid a surcharge, which is typically 5% of the unpaid amount.

6. Keep Records 

Keep a copy of your tax submission and all related documents for 7 years, as per legal requirements.

Final Thoughts and Key Reminders

Navigating Hong Kong's tax filing process is immensely easier if you plan ahead and keep proper records. Whether it’s tracking your deductions or using the IRD’s eTax portal to file smoothly, paying attention to every step can save you time and money.

Want even more help? Reach out to a tax professional or financial advisor to ensure you're optimising every allowance and deduction you're entitled to.

Filing taxes doesn’t have to feel like a struggle. With these steps, you’re well on your way to stress-free tax returns!