Companies in mainland China shall withhold and pay individual income tax when paying salaries to their employees, because the Interim Measures for Withholding and Paying Individual Income Tax stipulates that the withholding agent shall withhold and pay individual income tax when paying wages and salaries to individuals. But unlike the mainland, Hong Kong's individual income tax is directly reported and paid by taxpayers.

If the annual salary of employees in Hong Kong company exceeds13200In Hong Kong dollars, the Inland Revenue Department will issue a Salaries tax return to an individual. The individual will complete the return. After completing the return, the Inland Revenue Department will issue a Salaries tax return. Upon receipt of the tax return, tax is payable in accordance with the amount on the tax return. If an individual is not a Hong Kong person and works for a Hong Kong company in a place other than Hong Kong, he or she can raise a tax objection at the same time of paying tax. If the objection is successful, the tax office will refund the tax paid.

As a result, Hong Kong companies do not have to withhold salaries tax. (Salaries tax in Hong Kong is similar to personal income tax in China, but is more narrowly levied only on salaries earned by individuals from Hong Kong companies.) It is worth noting that although Hong Kong companies are not required to withhold salaries tax, each year4Hong Kong companies must report to the Hong Kong Tax Bureau in January56BA form (the Employee Return Form) which states the basic information of the employee, including his/her identity, nationality, job title, address and annual salary.

CycloseThe company is committed to providing domestic and foreign customers with corporate audit, tax declaration, registration, annual inspection, tax planning and other services in Hong Kong, Singapore, Dubai and other regions. Efficient, rigorous, intimate service has been favored by many private enterprises, listed companies and large state-owned enterprises.