The Financial Secretary of Hong Kong delivered the 2023-2024 Budget on 22 February 2023, which includes a series of proposed relief measures to reduce the community’s burden.1
In this GMS Flash Alert, we highlight some of the key tax measures that affect individuals and their employers, amongst which, changes to Salaries Tax and tax under personal assessment, Profits Tax, and basic child allowance and the additional child allowance.
The proposed relief measures for 2023-2024 and tax reduction for 2022-2023 will potentially affect the tax payable by employees in Hong Kong. Key proposals affecting individuals and their employers include a reduction of the 2022-23 Salaries Tax and tax under personal assessment by 100 percent, subject to a ceiling of HKD 6,000. There is an increase of the basic and additional child allowance to HKD 130,000.
Once they come into effect, the proposals may necessitate adjustments to tax clearance returns already filed for 2022-2023 and hypothetical tax calculations for 2023-2024.
In the Hong Kong Budget 2023-24, the government projected the third fiscal deficit in four years. However, despite this, Hong Kong fiscal reserves remain strong at an estimated HKD 817.3 billion as of 31 March 2023.
Key proposals affecting individuals and their employers include:
This year’s Budget provides a range of immediate and short-term measures aimed to encourage economic turnaround. Targeted measures have been increased to attract talents to the Hong Kong labour market and enhance Hong Kong’s economic competitiveness.
For a full analysis of the Budget, see “Hong Kong Budget Summary 2023-2024,” a publication of the KPMG International member firm in Hong Kong; also visit the Hong Kong member firm’s dedicated Budget webpage.
Legislative proposals do not generally become law until their enactment and may be modified before enactment.
1 For the text of the Budget speech (in Mandarin/Chinese and English), and related documentation and videos, see: https://www.budget.gov.hk/2023/eng/index.html.
HKD 1 = EUR 0.11979
HKD 1 = USD 0.127
HKD 1 = GBP 0.1048
HKD 1 = AUD 0.19
Source: www.xe.com
The information contained in this newsletter was submitted by the KPMG International member firm in Hong Kong.
GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
© 2024 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
