[bbb]

KIA or others please enlighten.

Leaving aside CPF/MPF and comparing apples to apples, where do you pay higher tax on same salary - HK or Singapore?

[freeier]

depends on salary.
at low level HK has a very high deduction (100~200k HKD depending on whether u are married). but the income tax rate starts at 16%.

SG the deduction is lower, personal = 3 or 5k SGD (i.e. 20k HKD) but you get a CPF component that is tax free. so if you are maxed out on your CPF (income of >5k SGD p/m) then u get an additional 12~15k SGD exemption, so that pretty much washed out.

once you cross the deduction level, the first 50~80k or so in SG is taxed at below 6/9/12%, you probably only hit 15% at maybe 150k sgd.

so if you income level is lower than 150k SGD, then HK tax is higher.
once you cross 200k SGD, SG bracket can go up to 20% (used to be 33% but i think they change the max level) and that is when you save more in hk.

so it all depends..

[sunniefaith]

I know this question must be asked like a 1000 times before....But i just have to ask. Is housing allowance taxable?

[PDLM]

It depends on your taxable income, and whether any of it is called "housing allowance" and whether you are single or married or have dependents.

At a quick look at the Singapore rates here: http://www.mof.gov.sg/taxation/indiv...tax_rates.html and the HK rates here: http://www.ird.gov.hk/eng/pdf/pam61e.pdf

for a single person with a simple salary (no housing allowance etc) then there is not much difference between the two at the low end (zero tax to S$20K or HK$100K), then the HK tax tends to increase a bit more quickly (at S$100K effective 7.1%, HK$500K effective 13%; at S$200K effective 11.5%, and HK$1M effective 16%), but once you get over HK$1M the 16% "cap" kicks in, but Singapore's rate keeps going up, so that, for example, on a salary of S$1M (roughly HK$5M) the Singapore effective tax rate is around 18% whereas HK is only 16%.

It is very straightforward to do the calculation for whatever salaries interest you from the links above.

[PDLM]

Originally Posted by sunniefaith

I know this question must be asked like a 1000 times before....But i just have to ask. Is housing allowance taxable?

Yes it has and yes it is.

If your employer "exercises proper control" to ensure that the allowance is indeed spent on housing then the taxable value of the housing allowance is 10% of your salary exxcluding housing allowance (regardless of how much the housing allowance actually is). If they do not exercise such control then the housing allowance is simply regarded as salary and taxed accordingly.

Details here: http://www.ird.gov.hk/eng/pdf/pam44e.pdf

[freeier]

sg or hk ?
sg i am not sure. but i suspect it is put as part of full package and taxed.
in hk if company pays housing for u, it is added into your package, but as a 10% of the remaining amount (i.e. if u are paid 100k hkd per month plus a housing cost of 30k the company borne, u are taxed at 100k + 10% = 110k HKD).

[PDLM]

The effect of which is, of course, to pull down the effective tax rate in Hong Kong and therefore bring it more into line with the Singapore rate at mid-income levels (the higher the housing allowance the more pronounced this effect).

[freeier]

but for people getting that kind of income, e.g. 1~2mil hkd per year, would they be paying that much in rental to make this profound ?

i.e. at 2mil per year, 10% = 200k which is close to 18k per month. not likely to see alot of impact. at lower level of maybe 600k~800k yes.

ok one question from me this time, for dependants that are not staying with you in hk, wld u get the tax deductions ?
spouse, kids, parents ? how to prove the relationship ?

[greentea]

Originally Posted by freeier

but for people getting that kind of income, e.g. 1~2mil hkd per year, would they be paying that much in rental to make this profound ?

i.e. at 2mil per year, 10% = 200k which is close to 18k per month. not likely to see alot of impact. at lower level of maybe 600k~800k yes.

ok one question from me this time, for dependants that are not staying with you in hk, wld u get the tax deductions ?
spouse, kids, parents ? how to prove the relationship ?

Can the below information help:

Married person's allowance

You are eligible to claim married person's allowance if you were, at any time during a year of assessment,


married and not living apart from your spouse; or
living apart from your spouse but was maintaining or supporting him/her;
and
your spouse did not have any income chargeable to salaries tax; or
you and your spouse have elected joint assessment; or
you and your spouse have elected personal assessment.

'Marriage' in the context of the Inland Revenue Ordinance is intended to refer a hetero-sexual marriage between a man and a woman. 'Spouse' is defined in section 2 as a husband or wife. 'Husband' means a married man and 'wife' means a married woman. Parties in a same-sex marriage are not granted married person's allowance because the provisions in section 29 cannot be satisfied in that they cannot have a 'spouse' within the definition of the term in the Inland Revenue Ordinance .

Or the information is available at: http://www.ird.gov.hk/eng/tax/ind_all.htm#03

[freeier]

thanks greentea.
so parents have to be staying in hk to make it claimable.. hmmm