香港薪俸税与两地双重征税安排
Thousands of professionals work across the Hong Kong–Mainland border every day. If you earn employment income in Hong Kong while spending time in Mainland China — or the other way round — you may worry about being taxed twice on the same salary. This guide explains how Hong Kong salaries tax works and how the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (the “Arrangement”) allocates taxing rights and prevents double taxation.
1. How Hong Kong Salaries Tax Works
Hong Kong operates a territorial system of taxation. Under section 8 of the Inland Revenue Ordinance (Cap. 112), salaries tax is charged on income arising in or derived from Hong Kong from any office or employment. In practice, employment income is Hong Kong-sourced when the services are rendered in Hong Kong, and remuneration for services performed wholly outside Hong Kong is generally outside the salaries tax net, subject to the detailed rules in the Ordinance. There is no tax on capital gains, dividends or bank interest received by individuals, and no social security contributions in the Hong Kong sense of the term.
Salaries tax is calculated in two ways, and you pay the lower of the two: tax at progressive rates on your net chargeable income (assessable income minus deductions and allowances), or tax at the standard rate on your net income (before allowances). The tax reduction announced in each Budget is then applied to the final tax.
2. Salaries Tax Rates and Allowances for 2026/27
The progressive tax bands have remained unchanged since the year of assessment 2020/21, according to GovHK:
| Net chargeable income | Rate | Tax on the band |
|---|---|---|
| First $50,000 | 2% | $1,000 |
| Next $50,000 | 6% | $3,000 |
| Next $50,000 | 10% | $5,000 |
| Next $50,000 | 14% | $7,000 |
| Remainder | 17% | — |
Since 2024/25, the standard rate has been a two-tiered rate: 15% on the first $5,000,000 of net income and 16% on the remainder. For 2026/27, single taxpayers earning up to about $2.13 million (and married couples up to about $3.37 million) still stay within the progressive rate zone, per GovHK.
The 2026-27 Budget (legislation passed by the Legislative Council on 13 May 2026 and gazetted on 22 May 2026) increased key allowances from the year of assessment 2026/27, as set out by the Inland Revenue Department (IRD):
| Allowance | 2025/26 | 2026/27 onwards |
|---|---|---|
| Basic allowance | 132,000 | 145,000 |
| Married person’s allowance | 264,000 | 290,000 |
| Single parent allowance | 132,000 | 145,000 |
| Child allowance (1st to 9th child) | 130,000 | 140,000 |
| Dependent parent/grandparent (aged 60 or above) | 50,000 | 55,000 |
| Dependent parent/grandparent (aged 55–59) | 25,000 | 27,500 |
| Elderly residential care expenses (deduction) | 100,000 | 110,000 |
The same Budget also gave a one-off 100% reduction of the final salaries tax, profits tax and tax under personal assessment for the year of assessment 2025/26, capped at $3,000 per case, and extended the additional child allowance for newborns from one year to two years (from 2026/27, up to $280,000 per child in the first two years after birth).
3. Why Cross-Border Workers Can Face Double Taxation
Mainland China taxes its tax residents on their worldwide income, while non-residents are taxed only on China-source income. Employment income forms part of “comprehensive income” taxed at progressive rates from 3% up to 45%, as summarised by PwC’s China tax summaries. Hong Kong, by contrast, taxes only Hong Kong-source income.
Consider a Hong Kong resident who exercises employment in Mainland China. Mainland China may tax the salary because the employment is exercised there, while Hong Kong may also assert a charge if the income is treated as Hong Kong-sourced. Without relief, the same income could be taxed by both sides — this is the double taxation the Arrangement is designed to eliminate.
4. The Mainland–Hong Kong Double Taxation Arrangement
The Arrangement was signed on 21 August 2006 and has been amended by protocols signed on 30 January 2008, 27 May 2010, 1 April 2015 and 19 July 2019. The Fifth Protocol entered into force on 6 December 2019 and applies in Hong Kong to income derived in years of assessment beginning on or after 1 April 2020, and in Mainland China to income derived from 1 January 2020. The authoritative consolidated text is published by the IRD.
The Arrangement is part of Hong Kong’s wider treaty network: as at 31 March 2025, Hong Kong had signed comprehensive double taxation agreements with 51 jurisdictions, according to the IRD Annual Report 2024-25. For cross-border employees, the Arrangement with Mainland China is the most relevant of them all.
5. Employment Income and the 183-Day Rule (Article 14)
Under Article 14 of the Arrangement, salaries, wages and other similar remuneration derived by a resident of one side are taxable only in that side, unless the employment is exercised in the other side. If the employment is exercised in the other side, the remuneration may be taxed there — unless all three of the following conditions are satisfied, in which case taxation remains exclusively with the side of residence:
- The recipient is present in the other side for periods not exceeding in the aggregate 183 days in any 12-month period commencing or ending in the taxable period concerned;
- The remuneration is paid by, or on behalf of, an employer who is not a resident of the other side; and
- The remuneration is not borne by a permanent establishment (PE) which the employer has in the other side.
Note that since the Fifth Protocol, the 183-day test is based on a rolling 12-month period rather than a calendar year. Example: a Hong Kong resident spends 100 days a year working in Shenzhen, is paid by a Hong Kong employer that has no PE in Mainland China, and the salary is not borne by any Mainland PE. All three conditions are met, so the salary is taxable only in Hong Kong.
6. Withholding Rates for Dividends, Interest and Royalties
For investment income, the Arrangement caps the tax that Mainland China (or Hong Kong) may charge on income flowing to a resident of the other side. The rates published by the IRD for the Mainland are:
| Income type | Maximum tax chargeable |
|---|---|
| Dividends — beneficial owner is a company directly holding at least 25% of the capital | 5% |
| Dividends — other cases | 10% |
| Interest | 7% |
| Royalties | 7% (5% for aircraft/ship leasing, per the Fourth Protocol) |
These caps apply where the recipient is the beneficial owner of the income. Gains from the alienation of shares quoted on a recognised stock exchange are taxable only in the side of which the seller is a resident (Article 13(6)), which is a well-known relief for cross-border equity investors.
7. Eliminating Double Taxation: Foreign Tax Credits (Article 21)
Where both sides are entitled to tax the same income, Article 21 eliminates double taxation by granting a foreign tax credit. Tax paid in Mainland China in accordance with the Arrangement on income derived from Mainland sources is allowed as a credit against the Hong Kong salaries tax (or profits tax) chargeable on that income, and vice versa. In each case, the credit is limited to the amount of domestic tax attributable to that item of income — so the total tax paid is never less than the higher of the two sides’ taxes, and never more than double taxation would otherwise produce.
For corporate investors, a resident company that directly or indirectly controls at least 10% of the shares of a dividend-paying company of the other side may also claim an underlying tax credit for the tax paid by the payer on the profits out of which the dividends are derived (Article 21(3)). If you believe you have been taxed inconsistently with the Arrangement, Article 23 allows you to present your case to the competent authority of your side of residence within three years of the first notification of the action, and the authorities may resolve the matter by mutual agreement. The two sides also exchange information under Article 24 to enforce their domestic tax laws.
8. Frequently Asked Questions
Will I pay tax twice if I work in both Hong Kong and Mainland China?
Generally no. The Arrangement allocates taxing rights (for example, the 183-day rule for employment income), and where both sides are entitled to tax, Article 21 grants a foreign tax credit so that the same income is not taxed twice.
How is the 183-day test counted?
It counts your aggregate presence in the other side within any 12-month period commencing or ending in the taxable period concerned — not per calendar year — following the Fifth Protocol which applies from the year of assessment 2020/21 in Hong Kong.
Does the Arrangement change my Hong Kong allowances?
No. The Arrangement only allocates taxing rights and grants relief from double taxation. Your Hong Kong salaries tax is still computed with the ordinary allowances — which increased for 2026/27, for example the basic allowance rising from $132,000 to $145,000.
My employer is a Mainland company with no Hong Kong presence. Do I still pay Hong Kong salaries tax?
It depends on where your services are rendered. Hong Kong taxes employment income that arises in or is derived from Hong Kong. If you work partly in each place, the source-side rules and Article 14 of the Arrangement determine how much each side may tax.
Where can I check the latest official figures?
The IRD publishes the withholding rates table, the Budget FAQ and the salaries tax rates page on GovHK. Always rely on the official text of the Arrangement rather than informal summaries.
Sources and Further Reading
- GovHK — Tax Rates of Salaries Tax & Personal Assessment: gov.hk
- IRD — FAQ on 2026-27 Budget (Tax Measures): ird.gov.hk
- IRD — Consolidated Text of the Mainland–HKSAR Arrangement: ird.gov.hk (PDF)
- IRD — Tax Rates for Dividends, Interest, Royalties and Technical Fees: ird.gov.hk
- IRD — Annual Report 2024-25, International Tax Collaboration: ird.gov.hk (PDF)
- PwC — China, People’s Republic of: Individual taxes on personal income: taxsummaries.pwc.com
Disclaimer: This article is for general information only and does not constitute professional tax advice. Tax rules change frequently — always consult the official sources above or a qualified tax adviser for your specific situation.