Base crew and tax

[Frogman1484]

I believe that Hong Kong IRD has requested CX to pass on the number of days you have spent in HKG in order for them to claim their share of tax.

If you spend more than 60 days during the financial year, you will have to pay tax in HKG.

As the ATO in Australia has already ruled that they will not be giving credit for any HKG tax, the direct implications of this change of heart could be a real financial mess.

This time though the based guys will be working for an Australian company, so the ATO will have first claim. I just wonder if the IRD will give us credit for the Australian tax?

[Border Reiver]

From the situation in the UK with KA UK Branch the HKG IRD wanted their tax on all earnings outside of the UK, this does reduce the bill enormously. Understand CX might have set up their UK company better than KA although the office address was the same. In the UK the Inland Revenue do allow HKG tax to be offset against UK tax, although I am still waiting for the refund that has been claimed.

[Oval3Holer]

EDITED FOR nitpicker330 (and others like him/her)

HK Tax = Annual Earnings x (Number of Days in Hong Kong/365) - Full Married/Single Persons Allowance

I was in Hong Kong about 70 days last year and paid about HKD 750- in taxes in Hong Kong.

In other words/equations: if you are not a Hong Kong resident and pay tax elsewhere, take your annual earnings as shown on the annual statement in the company intranet, multiply that by the number of days you spent in Hong Kong between April 1st and March 30th of the following year (the tax year in question), and divide that result by 365. THEN, subtract from that result the full married person's allowance (if you are married) or the full single person's allowance (if you're single). The result will be your Hong Kong taxable income for that year. Go into the Hong Kong tax tables and figure out how much you owe.

Here's an example:

Salary HK$1,200,000
Days in Hong Kong: 75
75/365X1,200,000 = HK$246,575
Married Person's Allowance: HK$200,000
Net Chargeable Income 246,575-200,000 = HK$46,575
Tax on that: about HK$814

[nitpicker330]

huh??????????

Try that formula again please.

[F_one]

Ovall, Close.

15% of 46K is not $814, closer to 8K.

You can also add children's allowance if you have children.

Other question is, will you get full credit for married/children allowance or will it be pro-rated for the amount of time spent in Hong Kong i.e. $200 000 x (75/365)?

IF all of this is true...

[Near Miss]

So let me get this straight. You live in another country. You are employed by a company from that country. Yet when you fly to HKG for work (what about holidays?) the IRD will expect you to pay tax for those days? Do they also tax staff from other airlines that operate here (VS, BA, QF, AA, EK, and so on)? What about staff from other industries (banks, law firms, fuel companies, shipping, etc)? Are they expected to pay tax for the days that their job has them in HKG even though they live and pay taxes elsewhere? :confused:

I am HKG based, and thus rightly pay taxes here, but with the ever increasing greed of governments, will the day come where I will need to pay taxes on departure for the days/hours spent in their country? What is the tax rate in TPE? Those Split Duties could become expensive. By the same token, I should also should not be expected to pay tax for days spent out of HKG? I would spend roughly half the year away, so perhaps I should only pay half tax, as I am not using the HKG infrastructure. And time over International Waters? Surely that should be tax free! ;) But seriously, where does this end? The greedy :mad:

[the reo]

F_one
15% is a standard rate. See the IRD website.
You have to get your taxable income >120,000 before the 17% rate starts to apply. If you have a look at the IRD table I think you'll find that Oval 3 holer is correct on the amount of tax that would be due on $46,575

Married person allowance.
With the tax clearance (leaving HKG to go onshore AUS) on 30 Jun the IRD did allow me a full married person allowance even though we were only talking about 3 months of the financial year. ie they did not pro-rata (did not reduce) the married person allowance.

[Waterskier]

I can also confirm the IRD is using that formula.
(Days in HKG/365 * income - Single/Married Person Allowance)=Income chargeable to HKG tax)

One thing I found during my experience is a discrepancy in counting days...

CX counts any day in HKG as one full day in HKG (arrive on Monday, depart on Friday... thats 5 days).

HKG IRD counts the arrival and departure days as 1/2 days. So arrive on Monday and depart on Friday is 4 days. Arrive Monday and depart Tuesday is only 1 day. Arrive and depart on Monday is a 1/2 day.

This can significantly reduce your "days in HKG" for IRD purposes.

GovHK: How to Report Income in Your Tax Return (http://www.gov.hk/en/residents/taxes/salaries/salariestax/exemption/employee.htm)

[Oval3Holer]

NearMiss, the basing companies, at least the ones of which I have knowledge, are Hong Kong registered corporations. Therefore, the HK government treats you as working in Hong Kong when you are IN Hong Kong.

Yes, believe it or not, you get the FULL allowance, not a prorated one.

And, yes my % calculation was wrong, but the tax amount is correct.

[BuzzBox]

So what happens with HK tax now that the basing companies are being on-shored? According to yesterday's missive from MBC, HKIRD still considers based pilots to be employed in Hong Kong.

[airplaneridesrfun]

It sounds like some people will be using the right of return to Hong Kong due to the fact that they are 'illegal citizens' in their present basing. I wonder how that interview will go..... "so, you knew you were not allowed to work in Country XYZ; but you made excuses for why you could and thought that was ok?" .... and now you want us to help you out? Wow. That will be a big pill to swallow for both the company and the officers. It might be surprising how many base vacancies come out of this.

[GTC58]

The company hired US DEFO's directly onto Canadian bases and since 1993 Canadian DEFO's onto US bases, knowing that these officers had not the right to live and work in the particular country, but CX's position was that these was perfectly legal as all these officers are commuting from their respective home country operating HKG registered aircraft.