When expats are trying to understand what the tax system is like in Hong Kong, it is important to note a few things. For example, if you have acquired a long-term Hong Kong visa, you have to pay Hong Kong income tax, just like every other fiscal resident. Another thing to keep in mind, especially for frequent travelers, is that your income is taxed according to the territorial principle. This means that only what you earn or accrue in Hong Kong is subject to Hong Kong income tax.
Tax rates in Hong Kong deserve their reputation of being competitively low. They rise progressively with higher salaries. Nevertheless, the maximum rate, even for the top tax bracket, is only 17%.
To avoid double taxation, Hong Kong has concluded negotiations with a number of countries regarding double taxation relief. These agreements come into play if a fiscal resident has to pay taxes on their income in other countries and thus would have to pay for the same income twice.
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