If this is your first time receiving the BIR60 tax form, it’s common to get puzzled and have no idea where to start. Although the BIR60 tax form can be overwhelming at first with its numerous tax items and confusing instructions, you will get a better picture of this tax form and tips on how to fill it in after reading the guide. So, get your tax filing and pen ready. Let’s get things started.
Table of contents: Hong Kong BIR60 tax filing
- Filing of Tax Return – Individuals (BIR60)
- Filling in the BIR60 Form Section 4: Salaries tax
- Filling in the BIR60 Form: Tax deductible sections
- Tax payment tips in Hong Kong
- Frequently asked questions: BIR60 tax filling form
Filing of tax return – individuals (BIR60)
Before we start, let’s go through the basics of tax filing so you can grasp some basic ideas. The official name of the tax form is “Individual Tax Return (BIR60)“. It consists of the following 12 parts:
|1. Personal Particulars
|Name, ID number, address, spouse, etc.
|Special situations, such as appointing someone else to fill out the form, need to be notified here. Otherwise, it can be skipped.
|3. Property Tax
|Declare rental income from properties.
|4. Salaries Tax
|Fill in the income for the tax year.
|5. Profits Tax
|Declare income from a sole proprietorship, while partnership businesses are not required to fill in here.
|6. Assessed Profits Under the Inland Revenue Ordinance
|Calculate the assessable profits from business activities in Hong Kong within the basis period.
|7. Personal Assessment
|If you are not a business shareholder or rental property owner, fill in “no” for this section.
|8. Deduction for Interest Payments and Domestic Rents
|Apply for an interest deduction if you are paying a mortgage on self-occupied or rental properties.
|9. Qualifying Premiums Paid under Voluntary Health, Insurance Scheme (VHIS) Policy
|Apply for deduction of premiums paid for qualified voluntary health insurance scheme for yourself or your family members.
|10. Deductible MPF Contributions and Qualifying Deferred Annuity Premiums
|Apply for the deduction of deductible MPF contributions and qualifying deferred annuity premiums for yourself or your spouse.
|11. Allowances and Elderly Residential Care Expenses
|Apply for a tax deduction if you meet the following conditions: married, claiming allowance under the disability allowance scheme, and financially supporting parents or children.
|Sign and date to certify the information provided.
The table above introduces the basic sections of the BIR60 tax form.
Salaries tax return filing process
Completing and submitting a Salary Tax Return, also known as a BIR60, may seem daunting, but it is actually a straightforward process. Here is the standard Salaries Tax Return filing process:
- Employers notify the Inland Revenue Department (IRD) within 3 months of employing an individual about their chargeability to Salaries Tax using Form IR56E.
- Upon receiving Form IR56E, the IRD’s tax system automatically generates a tax file in the employee’s name and issues a Salaries Tax Return (if necessary) within 5 months.
- The employee then completes and submits the tax return to the IRD by the specified date printed on the Salaries Tax Return, along with any required supporting documentation.
So, don’t fret! The process of filing your Salary Tax Return is simpler than it may seem. After knowing the basics, let’s move on to the sections that most people have questions about: the Salaries Tax and Tax Deductible sections.
Filling in the BIR60 form section 4: Salaries tax
“Salaries Tax” is calculated based on the actual income for the tax year using progressive tax rates or based on the net income using standard tax rates, whichever results in a lower tax amount.
More notes regarding income
The term “income” includes:
- Salary and Wages
- Leave Pay
- Payment for back pay, retirement, or termination of service
- Notice Pay
- Any additional rewards given in cash, cash convertible, or with monetary value, such as cars or stocks
- Education expenses, directly or indirectly, paid by the employer for your children
- Bonus received in the relevant tax year according to the employment contract
- Cash allowances for meals, transportation, domestic helpers, housing, and living expenses
- Proceeds from share options
- Any shares or share awards received due to employment or holding a position
- Payments received upon retirement, termination of employment, or termination of employment contract (lump sum payments)
- Payment for back pay or wages (lump sum payments.)
Regarding income, there are 3 points to note:
- Income earned from outside Hong Kong but derived from employment or service in Hong Kong is considered income.
- Income from share options is taxable upon exercise (even if you have quit the job), transfer, or surrender.
- Jury allowances, severance payments, and long-service payments are not included in income.
Section 4 “Salaries Tax” of the BIR60 form is divided into 4 parts, with the abovementioned income distributed in 4.1 and 4.2. You may follow the instructions to fill it in accordingly.
Tax deductions from MPF from sections 4.3 / 4,4
In section 4.3 “Deductions,” you can claim deductions for expenses related to work, such as fees for cleaning uniforms, examinations for professional qualifications, eligible educational expenses, and approved charitable donations. In this section, it’s important to keep in mind that reimbursable expenses cannot be included, and you should retain the necessary receipts for application purposes.
Additionally, don’t forget to take advantage of MPF deductions, as they are often overlooked by new employees. Remember that the MPF exemption limit can go up to HK$18,000, so be sure to include it when filling out the form.
Section 4.4 is specifically for the “Election for Joint Assessment” and is only applicable to married individuals. This election can generally reduce the overall tax payable by both individuals.
If you are interested in learning more about the salary tax in details, head over the blog post here!
Filling in the BIR60 form: Tax deductible sections
The following part is specifically for tax-deductible sections mainly related to the BIR60 form sections 9, 10, and 11.
Tax-deductible section for VHIS, Qualifying Annuity Premiums, and Tax-Deductible MPF Voluntary Contributions
Sections 9, 10, and 11 are for applying deductions for voluntary health insurance schemes, qualifying deferred annuities, and voluntary MPF contributions. You can fill out this section if you participate in any of these schemes. It is worth noting that in addition to your own participation, if you pay voluntary health insurance premiums for parents, grandparents, or in-laws, or pay qualifying deferred annuity premiums for your spouse, you can also fill in deductions in sections 9 and 10.
Tax-deductible section for allowances for children, parents, married persons, and personal disability
Supporting parents’ allowances
If you support parents’ or grant-parents’ expenses, then you are eligible to claim tax deductions. There are 3 quotas in section 11.4. However, the beneficiaries must meet the following conditions:
- Usually reside in Hong Kong.
- Be at least 55 years old or eligible to claim a government disability allowance.
- Have lived with you for at least 6 consecutive months without paying full expenses, or you and your spouse pay for expenses of at least HK$12,000 per year.
Elderly residential care expenses
On the other hand, if your parents are aged 60 or older and reside in a residential care home within the tax year, you can choose to apply for a deduction of elderly residential care expenses. However, you can only either apply for the deduction for providing for parents’ expenses or the deduction for elderly residential care expenses. If both are applied for simultaneously, only the deduction for elderly residential care expenses will be approved.
Also please note that the beneficiary can only be filled out on one tax return. If you apply for it, your spouse cannot apply for it.
Tax filling tips in Hong Kong
Tip 1: Calculate your tax liability yourself
The tax year runs from April 1 to March 31, and your tax liability is based on your income during that period. There are 2 methods to calculate salaries tax, and the lower amount is applicable:
- Net Assessable Income = Total Income – Deductions – Allowances
- Net Chargeable Income = Total Income – Deductions
You can use the Tax Calculator provided by the Inland Revenue Department to estimate your tax liability. If needed, you can apply for tax installment payment before the deadline by submitting evidence of financial difficulties.
Keep in mind that if you don’t apply in advance, late payment will result in a 5% penalty, and if the tax remains unpaid for more than six months, an additional 10% penalty will apply.
Tip 2: Make use of personal allowances and deductions
Employees generally enjoy basic allowances, and there are additional allowances for married individuals, those supporting parents or grandparents, and other specific circumstances. On the other hand, common deductions include charitable donations, MPF contributions, self-education expenses, and voluntary medical insurance premiums (VHIS).
Tip 3: Opt for convenient online tax filing
In addition to physical tax returns, you can consider registering for online tax filing through “eTax” to set up your personal account. Besides being more convenient, online tax filing grants you an extra month of filing grace period. Once registered, the Inland Revenue Department will no longer send you green envelopes. All tax-related documents, including tax returns and demand notes, will be notified to you electronically, so remember to check your email.
Tip 4: Pay your tax with credit card
Online tax filing simplifies the tax payment process, requiring just a few clicks. On top of that, you have the option to conveniently pay your taxes with a credit card, earning cashback, miles, and other rewards.
Paying Taxes with credit card:
Most credit cards can be used to pay taxes and earn rewards. However, cardholders should check if their credit card rewards program includes tax payments. Paying taxes with a credit card through online banking is simple and can be done in a few easy steps:
- Select your credit card.
- Choose the tax payment bill and enter the bill number and amount.
- Confirm the payment.
Tips 5: Mark key tax filing dates on your calendar
To handle tax filing smoothly, it’s important to mark down the key dates to avoid late submission and penalties. The Inland Revenue Department (IRD) generally issues tax returns between May and early June each year. You should have received your 2022/23 tax return by now. If you choose to fill in a physical tax return, you must complete and submit it within 1 month from the date of issue. Online tax filing automatically grants you an additional month of grace period.
After filing your tax return, you will receive a tax demand note from October to April of the following year, usually split into 2 payment installments. Make sure to pay your taxes before the deadlines to avoid penalties.
|Timeline for Tax payment in Hong Kong
|Tax filling delivery date
|May and early June
|Tax demand delivery date
|October to April of the following year
Who is eligible for online tax filing?
Individuals with an eTAX Account can file their Tax Return for the years 2020/21, 2021/22, or 2022/23 through the Internet if they meet the following criteria:
- They do not claim exemption for part or all of their salary income.
- They do not own a sole proprietorship business with gross annual income exceeding $2,000,000 for that year of assessment.
- They do not have any deemed assessable profits under sections 20AE, 20AF, 20AX, and/or 20AY of the Inland Revenue Ordinance for that year of assessment.
- They have not obtained an advance ruling on any tax matter related to that year of assessment.
- They do not claim any double taxation relief under an arrangement specified in section 49(1) or 49(1A) of the Inland Revenue Ordinance for that year of assessment.
You can file your online tax filing here.
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Frequently asked questions: BIR60 tax filling form
Filling the BIR60 tax form for the first time often leads to confusion and misunderstandings. Here are answers to some common questions:
What is a tax year?
A tax year refers to the period from April 1st of one year to March 31st of the following year, totaling 12 months.
When is the deadline for submitting the tax form?
If you don’t have a sole proprietorship, you must submit the tax form within 1 month from the date of issue. If you file electronically, you automatically get an additional month.
How should the appendix section of the BIR60 form be filled?
The appendix section of the BIR60 form is typically filled when supplementing information related to a sole proprietorship or authorized by someone to file the tax return. Most people do not need to fill out this section.
Do freelancers need to file taxes?
This is a common misconception among newcomers to the workforce. Whether you are full-time, part-time, a freelancer, or self-employed, you are required to file taxes.
What if I haven’t received the BIR60 tax form? Do I still need to file taxes?
Yes, you are still required to file taxes if your income exceeds the personal basic allowance (for the 2022/23 tax year, the personal basic allowance is HK$132,000). If your income exceeds this threshold and you haven’t received the tax form, you should proactively notify the Inland Revenue Department.
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