Tax Efficient Structuring Of Salary Packages

Although tax on salaries in Hong Kong is very low there are a number of steps which an employee, with the co-operation of a sympathetic employer, can take which will make a significant difference to their end of year tax bill. You won't be surprised to hear that the difference is a substantial reduction in tax.

Those with a "non Hong Kong employment" who travel outside Hong Kong extensively, as many do, can avoid paying tax on a percentage of their salary equal to the percentage of days spent outside Hong Kong. For example, an employee who earns US$100,000 per annum but spends 40% of their time outside Hong Kong would only be taxed in Hong Kong on 60% of their salary. To be considered a non Hong Kong employee their contract of employment must be with a non Hong Kong company and must be both signed and negotiated outside Hong Kong. So this tax break is only available to those who work for multi-national companies and who can be contracted to another group company