I recently paid my Hong Kong taxes and reflected on how vastly different the process is than the US system. First, I take home 100% of my paycheck which is standard (OK I do have to contribute about US$125/month to something equivalent to Social Security). Absolutely zero taxes are withdrawn from anyone's paycheck.
The HK tax year follows the fiscal year, April 1-March 31, so in January, the tax form comes in the mail. It is literally 2 pages long and takes about 10 minutes to fill out. It is very similar to the short form I did in college. Again, this is the standard tax form for everyone. I don't have a special circumstance because I'm an American. I am a local hire.
About a month after the tax form is submitted, the bill comes. This is a bill for the whole year's taxes to be paid in one lump sum. Hong Kong has more or less a flat tax rate of 15% which is amazing considering all the social programs including almost free healthcare for everyone. Thus, it is no mystery how much your tax bill will be--far different situation than in the US.
To pay my taxes, I could do it online through my bank's website. They have a special button to "Pay Tax", just type in the amount and it is done. Easy Peasy. Why can't it be this simple in the US? I know many American's would not have the discipline to save 15% of each paycheck for an entire year. Isn't this is heart of America's current economic problems?
In comparison, our US, expat tax return is over 40 pages long!
Similarly, when we first contemplated moving to Hong Kong, we were warned that banking was difficult. The reality is that it is difficult to get credit cards and loans, but every other aspect that we've encountered is much more streamlined than in the US. I think the main reason is that the majority of people use 2 main banks. Paying bills is super easy and can be done at the ATM simply by transferring money from your account into the service provider's since you both bank at HSBC. I love it.
Good luck to all the US folks who are currently struggling with their tax forms.
About Me
- amy
- In September 2007, my husband, Erik, and I moved to Hong Kong. This blog lets our friends and family know what were're doing. Anyone who stumbles on it is welcome to follow along! I am trying to show a small glimpse into our lives and into the Hong Kong lifestyle. We love this city!
Posts
2 comments:
Very jealous! It's nice to see how other systems work isn't it? I think it's one of the best things of being abroad. xoxo
Interesting! Who knew it didn't have to be painful. But then again, the economy would tank if we didn't have to buy Turbo Tax or other software if we didn't have the $$$ to pay an accountant.
Post a Comment