Mainland tax not big deal, deputy assures

Local | Sophie Hui 10 Sep 2018

The State Council has the power to make exemptions for Hongkongers following amendments to the mainland's tax laws.

That was revealed yesterday by Tam Yiu-chung, a Hong Kong deputy to the National People's Congress standing committee. The committee passed the amendments last month, requiring everyone who has lived in the mainland for 183 days or more to declare income earned worldwide as that could be subject to taxation.

But Tam urged SAR people not to be concerned about the amendments, saying on TVB that Beijing was looking out for Hongkongers.

The new system takes effect on January 1, but Hong Kong and Macau residents have already been given a five-year exemption period.

And Tam hopes that can be extended further - a view he has already shared with mainland authorities.

Going further, Tam has also called on Beijing authorities to consider writing a clause in the tax code so that SAR residents only pay tax in Hong Kong.

Anyway, he noted, at the end of the day the State Council has the right to make exemptions as it sees fit.

The amendments to the tax code came soon after Beijing announced the introduction of new residency permits for people from Hong Kong, Macau and Taiwan.

People must have resided in the mainland for more than six months to qualify for a permit, and Tam pointed out there is no time limit or a quota in effect when it comes to seeking residency status.

Holders enjoy various rights including health services and education, but Tam insisted that the system was not linked to taxation.

But he agreed that when people are looking to apply for a permit the changes to the tax code could be on their minds.

"Issuing the residency permits is not directly related to the individual income tax rate," he stessed. "The residency permit aims to provide convenience to Hongkongers rather than collecting tax from us."

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