Under current prevailing Hong Kong tax law, for an employer provides rent-free or subsidized accommodation to the employee, or for the employer wholly or partly reimburses the rent paid by the employee under a lease entered by the employee, instead of taxing the employee on the actual amount of rent paid or reimbursed by the employer, the Inland Revenue Ordinance specifies a calculation of rental value (“RV”) to be treated as taxable value of housing.
To compute the RV, rent paid by the employee to the employer or the landlord can be deducted to arrive at the RV.
The RV is calculated at 4%, 8% or 10% (*) of his/her total net income from the employer and the associated corporation after deducting outgoings and expenses (excluding expenses of self-education), depending on the type of accommodation provided.
(*): Depends on the types of accommodation
However, if the employer does not control how the employee would spend the money or has not exercised proper control over the expenditures, the Assessor will regard the reimbursements as cash allowance and include the full amount as income in the Assessable Income.
Proper control means;
Simple illustration for tax saving under preferential treatment on rent-free accommodation vs housing allowances:
For the year of assessment from 1 April to following 31 March;
Mr. A’s total income subject to Hong Kong salaries tax is:
Preferential treatment on rent-free accommodation (HKD)
Housing allowances (HKD)
|Rental Value of Accommodation, 10% on all other income (in this case 1,000,000)||
|Total Assessable Income||
As can be seen by comparing the two, although the total costs of the employer is the same, being HKD1,500,000, the assessable income of the employee is significantly reduced when it is determined that the employer is providing accommodation to the employee.
For any tax advice in relation to the above, we are happy to assist.
Fidinam (Hong Kong) Limited
Room 1501, Prosperity Tower
39 Queen’s Road,
Central, Hong Kong
Tel:(852) 2110 0990
The Free Trade Agreement signed between Switzerland and China entered into force in July 2014 certainly contributed to create stronger economic ties between the two countries. However, as Fidinam Group Worldwide Vice Chairman, Mr. Paolo Balen explains during a recent interview, the real competitive advantage of Switzerland relies in the great value the Chinese business partners associate to the « Swiss made » brand.
Learn more about the topic thanks to the interview released by Mr. Paolo Balen to Rete Uno Radio Svizzera Italiana. The interview has been carried out by Mr. Guido Santevecchi, news correspondent from Beijing working at Corriere della Sera and Mr. Jean-Philippe Béja, political analyst and director at The National Center for Scientific Research (CNRS) in France.
On the 7th May 2017, France has elected Emmanuel Macron as its new President. The latter already introduced a project of taxation reform which foresees to change the current tax environment, beginning with the French wealth tax (ISF) and the passive income tax.
The wealth tax reform, from 2018
The wealth tax should become the real-estate wealth tax (ISI) and would only target property assets, offering a tax relief on movable assets held by French tax payers. This reform intends to cease penalizing investment in the national economy by the housing tax exoneration for 80% of the population, that would be supported by an increase of the general social contribution (from 8.2% to 9.9%).
The revision of passive income taxation
The government also wishes to simplify the complex passive income tax system, replacing the current progressive rate by a “flat rate” (single fixed sampling) of 30%, including social contributions. The revision concerns incomes generated on interests, dividends, capital gains, life-insurance contracts and traditional savings accounts. On the other hand, the reform should not trigger modifications on the tax regime of Savings Plan for Action (apart from the general contribution rise mentioned above), nor on special saving accounts (i.e. Livret A).
French attractiveness for corporations and individuals
The President has pledged to cut the corporate income rate to 25%, instead of 33.3%, by the end of his five-year mandate. A way to promote French attractiveness for corporate organization, to stimulate business opportunities and thus expatriation to France. Following the PLF 2017 (Finance Law Project) and the article 155B of the CGI (French Tax code), the foreign employees and executives willing to work in France benefit from a specific and advantageous tax regime. This include tax exemption on the foreign part of their income, on their repatriation premium and on their salary during the 8 years following their employment.
Implementation of UBO register
A directive from the European Union has been implemented on August the 1st 2017 in the French domestic Law, aiming to strengthen the AML (Anti-Money Laundering) regulation and the prevention of financial terrorism. The decree introduces new obligations for entities already registered under the French registry (RCS) to provide information about their Ultimate Beneficial Owners (UBO). Companies incorporated after the 1st August 2017 shall directly identify and register their UBO. This new regulation also applies to French branches of foreign companies, non-listed French enterprises or economic interest groups that have their registered seats in France, as well as legal entities that will register an entity in France. Legal entities that were incorporated before 1st August 2017 need to declare their Ultimate Beneficial Owners by 1st April 2018.
Managing Director Fidinam Hong Kong
Fidinam Hong Kong
Room 1501, Prosperity Tower
39 Queen’s Road Central
Tel: 852 2110 0990
FIDINAM: Over 50 years of professional advisory services
Thursday, November 2nd, Fidinam Group Worldwide will organize a business lunch in collaboration with the SwissCham Australia. The event will take place at O Bar and Dining, Sydney from 12h to 14h. The guest speaker will be a member of Fidinam Group Worldwide managing board, Mr. Alessandro Pedrinoni.
Jointly organised by the HKTDC and MOFCOM between the 3th and the 5th of July 2017, the Belt and Road Salon in Qingdao promoted Hong Kong as a super-connector in China outbound investment. More than 100 enterprises from Shandong participated.
Delegates shared their experiences on the opportunities and challenges when expanding their business footprints in the emerging markets. Fidinam has been invited as a guest speaker and explained how to structure their OBOR investment via Hong Kong, Singapore and the UAE with our local offices.
Find out more from the official press release: http://qingdao.mofcom.gov.cn/article/dongtai/201707/20170702605050.shtml (Chinese)
We are glad to share the photographs of the recently organized, inaugural UltraVault event, jointly sponsored by Fidinam Group.
The event was a great success, for both organizers and guests.
Gold and Diamond experts explained the benefits of precious metal investment to the attendees and provided insights on private vaults and depository solutions.
The recent participation at the China Offshore Summit 2017 taking place in Shenzhen has been a great opportunity for our group of delegates to promote Fidinam’s worldwide operations.
By belonging to the circle of companies that sponsored the event, Uny Chan, Manager at the Swiss Desk of Fidinam Hong Kong, had the chance to step on stage and present Fidinam in front a wide audience of international companies and Family Offices