How does the “wealth tax” affect you? If you are one of them, how should you deal with it?

The Hong Kong terms “emperor of working” refers to highly paid employees whose income surpasses that of many employers. One of the tax measures in the latest budget proposal is the implementation of a two-tier tax rate system for salaries and personal income tax starting from the 2024/25 tax year. 

Under this system, for taxpayers whose net income exceeds HK$ 5 million yuan, the tax amount for the first HK$ 5 million of net income remains unchanged at the current rate of 15%, while the portion exceeding HK$ 5 million will be taxed at a rate of 16%.

If this measure applies to you and you have to pay an additional 1% “wealth tax” for an annual income exceeding HK$ 5 million, it means that your income is quite substantial over the average. 

Besides congratulating you, I would also like to remind you, “Have you consulted a professional accountant for tax planning yet?”

Paying taxes is a civic responsibility, and minimizing taxes is an individual responsibility. 

Regardless of whether your annual income exceeds HK$ 5 million, it is always recommended to have an accountant handle tax matters.

They can provide advice based on your profession, salary calculation methods, etc. For example, they can advise you on whether to establish an unlimited company or customize suitable tax arrangements, which can potentially save you ten times the amount of tax with proper planning.

Different industries and job types have distinct characteristics and risks, including potential legal liabilities. There is no one-size-fits-all formula for tax minimization. 

Consulting us, Maxi Solution Accounting, early on ensures that you can legally and astutely handle your tax returns without any worries.

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