[PDLM]

Originally Posted by kasumen

On the other hand, I have been advised that the whole sum of rental is tax deductible (If it is paid by ourselves), is that right?

No. See the document that I linked to in my previous post.

[kasumen]

PDLM, I have basically glance through the document but still not very sure how it works. Assuming proper control is in place, rental paid by employee per month is HK$10,000

Salary HK$180,000
Housing Allowance HK$120,000
Total package HK$300,000

Therefore,
Income HK$300,000
RV HK$300,000*10%-HK$120,000 (HK$ 90,000)
Assessable Income HK$210,000

Am I calculating it correctly? Doesn't seems logical to me.

[PDLM]

No.

Salary = HK$180,000
Taxable value of Housing allowance (regardless of how big that housing allowance is, provided that the employer can show that you spend it all on rent) = HK$18,000 (10% of salary)

Total income for tax purposes: HK$198,000

Note that if you get any bonuses then these will also increase the taxable value of your housing allowance.

So if, for example, you get a bonus of HK$20,000 at the end of the year then:

Salary = $180,000
Bonus = $20,000

Taxable value of housing = $20,000 (10% of salary + bonus)

Total income for tax purposes = $220,000

[carang]

that's what i thought....no where did he say he was getting a housing allowance, only that he could deduct rental payments...

i used to own a company and hadd rental payments as part of my "package" to lower taxes, but never did i get the entire amount deducted....

[kasumen]

IC. Fully understand now. Well, I am being told the total sum of rental is tax deductible, that makes me so confuse. Thanks for the explaination. All of you are very helpful!