Salaries tax
Salaries tax is a type of income tax that is levied in Hong Kong, chargeable on income from any office, employment and pension for a year of assessment arising in or derived from the territory. For purposes of calculating liability, the period of assessment is from April 1 to March 31 of the following year. Salaries tax is also charged on the unrealized capital gain of shares or options granted as part of an employee share scheme that are subject to a vesting period. Events that trigger tax are when the vesting period ends or when the employee  leaves Hong Kong. Chargeable scope. Salaries tax is imposed on any office, employment and pension sourced in Hong Kong. Office basically refers to the holding of office as a director or company secretary of the company resident in Hong Kong. Director's fee is fully taxable in Hong Kong irrespective where the director rendered services in Hong Kong or not. Income derived from employment sourced in Hong Kong is taxable in Hong Kong. The source of employment is laid down in the Goepfert Rules and Departmental Interpretation and Practice Note No.10. However, those individuals who visit Hong Kong for periods  not exceeding 60 days will be exempt from paying Salaries Tax. This provision is known as the "sixty-day rule". Employment sourced in Hong Kong will be fully chargeable to Salaries Tax whereas offshore employment will be chargeable on a "time-in-time-out" basis, the taxable income of which will be apportioned by reference to the days present in Hong Kong. Employment of a government civil servant is considered sourced in Hong Kong and therefore its income is always fully taxable in Hong Kong. The above-mentioned "sixty-day rule" shall not be applied to seamen and aircrew. Instead , they are bound by stricter conditions for exemption. To be exempt from liability to Salaries tax, they shall be present in Hong Kong not more than 60 days in the year and not more than 120 days in the two consecutive years, one of them being the current tax year. A pension will be considered to be sourced in Hong Kong if it is managed and controlled in Hong Kong. Liability to tax. Employers must report details relating to new hires to the Inland Revenue Department within three months of the commencement of employment, which will enable to IRD to  send out tax returns for the year of assessment. If the employee does not receive a return, he is required to send the Department a notification of chargeability by 31 July following the year of assessment. The tax is payable directly by the taxpayer, who is also obliged to remit provisional salaries tax by instalments based on the previous year's liability. Income subject to tax. Liability for salaries tax arises from two separate sources: Under "Commissioner of Inland Revenue v George Andrew Goepfert", the following factors must be taken into account to determine where the source of income arises  for an employment (whether inside or outside the territory): Employment income is deemed to include the following: Calculation of liability. Salaries tax is chargeable on the lower of: Deductions include expenses necessary for earning such income (such as professional membership dues for one association), expenses for self-education (subject to a ceiling of $80,000), charitable donations (subject to minimum and maximum limits), contributions to the Mandatory Provident Fund or other occupational retirement schemes, home loan interest (subject to a lifetime limit of 15 years) and elderly residential care expenses (subject to a ceiling of $76,000). Allowances are available  for married persons, single parents and various dependents. Personal assessment is also available where a taxpayer is also subject to property tax and/or profit tax. Married couples may opt for joint assessment of their liability.