After 183 days of residence, you must declare global income. Mainland tax reform. Hong Kong people are expected to receive 5 years of grace.

The Standing Committee of the National People’s Congress officially passed the amendment to the Individual Income Tax Law (ie, Salaries Tax). From January 1, 2019, individuals who have lived in the Mainland for 183 days need to declare global income, including Income from deposits abroad, dividends and property sales. As far as the people of Hong Kong are concerned, they will break into the tax net. The representative of the Hong Kong District People’s Congress, Tan Yaozong, said that under the new tax system, Hong Kong people are expected to receive a five-year grace period, and that they will only declare global income after 2024.

The new tax law stipulates that the personal income tax allowance will be increased from the original monthly RMB 3,500 (the same below, approximately HK$ 4,019) to RMB 5,000 (approximately HK$ 5,742), and tax deductions will be increased, including child education, continuing education, and major medical care. , housing loan interest or housing rent, support for the elderly and other expenses, but the specific scope, standards and implementation steps are determined by the State Council.

The new tax law will come into force on January 1, 2019. However, before this, the taxpayer’s income from October 1 to December 31 this year will be calculated by the new bill.

The Ministry of Finance estimates that under the new tax law, the state tax will be reduced by 320 billion yuan (about 367.4 billion Hong Kong dollars) a year, which is believed to promote consumption and drive economic growth.

In addition, the new tax law shortens the individual taxpayer’s standard from one year of domestic residence to 183 days, and the taxpayer’s income obtained inside and outside China must be taxed according to the Chinese tax law. This is different from the current practice of foreigners living in the Mainland for five years before they can pay taxes on all income.

Hong Kong is the main place of residence or exempt

According to the Standing Committee of the National People’s Congress Tan Yaozong, under the new tax law, Hong Kong people work in the Mainland for several years and own real estate. At the same time, they do not have long-term residence in Hong Kong. They also have elderly people who have retired in the Mainland but have real estate or other income in Hong Kong. It is possible to pay taxes. However, he pointed out that as Hong Kong and Hong Kong have signed a double taxation agreement, Hong Kong people working in the Mainland may be exempted if they can prove that their place of residence is mainly in Hong Kong.

Tan pointed out that Hong Kong and Macao people can get a five-year grace period, that is, they need to declare global income and pay taxes in the 6th year and 2024 after the amendment takes effect. He believes that the amendments and the arrangements for avoiding double taxation agreements are flexible. Mainland officials also attach great importance to the worries of the people of Hong Kong. I believe that the amendments will not increase the tax burden on Hong Kong people living or working in the Mainland.