Living in Hong Kong is a great experience for plenty of reasons like culture, the quality of life, beautiful mountains and beaches and many others. As an american tax for us residents living Hong Kong what exactly do you need to know about filing US expat taxes in Hong Kong?


Let’s know about US Expat taxes in Hong Kong?

If you are a citizen or permanent resident of the US, then you have to file US expat taxes with federal government every year no matter where you live or do work. You could be required to file an informational return on your assets held in overseas bank accounts with FBAR (foreign bank and other account reporting) form 114 to form 8938 statements of specified foreign financial assets.


Let’s know about the individual tax rates in Hong Kong

Net taxable income       Rate

0-50,000 HKD                   2%

50,001-100,000 HKD          6%

100,001-150,000 HKD        10%

150,001-200,000 HKD         14%

200,000 HKD and above 17%

Individual income is tax filing for us citizens living abroad taxes at either a progressive rate on net taxable income or at a standard rate of 15 percent on the net income. You can pay whichever is lower. Tax rates in Hong Kong are;

Hong Kong tax rates are not the lowest but surely they are competitive. This is true when compared to US federal income taxes which can be upto 37 percent.

The US is one of the governments that tax overseas income of their citizens (both permanent and green card holder), it does have special provisions to help protect them from double taxation including;

  • A foreign tax credit that could allow reduces your taxes on your remaining income by certain amounts paid to an overseas government.
  • The foreign earned income exclusion let’s you reduce your taxable income on US expat taxes by the first $105,900 earned as a result of your labors while a resident of an overseas country.
  • A foreign housing exclusion that lets an additional exclusion of income for certain amounts paid for household expenses that happen as a consequence of living abroad.

Keep in mind that you must be able to take benefits of these strategies to reduce your liability on US expat taxes. The tax year in Hong Kong is different than in the US. In Hong Kong, the tax year starts April 1 each year and ends March 31 next year. Taxpayers need to file their taxes within one month after the inland revenue department issues their individual tax return which is generally in early May. As your US documenting as well as reporting follows a calendar year, so you need to combine your pay stubs and other expenses record to complete your US tax return.