U.S. Expat Taxes in Hong Kong
5 min read
October 26, 2022
October 26, 2022
At a glance
Check out these tax tips for filing taxes in Hong Kong. H&R Block’s tax pros provide essential advice for U.S. Expats.
As an American or Green Card holder living in Hong Kong, taking care of your U.S. taxes can feel like a complicated task. Knowing which tax rules affect you and understanding your options is a lot to stay on top of.
With H&R Block, you can rest easy knowing you’ve found the right expertise for U.S. expat taxes in Hong Kong. Whether you need expat tax guidance on filing from abroad or information on FATCA and FBAR rules, we’re here to help.
Ready to file your expat taxes? We’ve got a tax solution for you—whether you want to DIY your expat taxes or leave it to one of our experienced Tax Advisors. Head on over to our Ways to File page to choose your journey and get started.
What Americans living in Hong Kong should know about U.S. taxes
Filing U.S. taxes while living in Hong Kong comes with new considerations and questions: “Do I have additional information to report to the IRS? How do my Hong Kong financial accounts affect my filing? What options do I have to reduce my tax bill?”
For starters, Americans and U.S. Green Card holders living in Hong Kong should continue to file a U.S. tax return each year.
Working as an American in Hong Kong can affect your taxes even if you don’t stay for very long. For example, if you earn income while on a short-term assignment, you’ll need to report that income on your U.S. taxes. As you establish deeper financial roots in Hong Kong, you’ll have more considerations for your American tax filing.
You may need to report your Hong Kong financial accounts and assets. Generally, U.S. taxpayers with more than $10,000 in foreign bank or financial accounts are subject to FBAR filing and reporting requirements. You may also be subject to FATCA reporting requirements if you have foreign assets valued at $200,000 and higher.
You can lower your U.S. bill and avoid dual taxation with certain tax strategies. Expats may take advantage of one of two options, detailed below, to lower their taxes.
- The foreign earned income exclusion allows you to exclude your wages from your U.S. taxes. This option is available to those who meet certain time-based residency requirements.
- The foreign tax credit lets you claim a credit for income taxes paid to a foreign government.
Due to lower tax rates in Hong Kong (see below), it’s generally more favorable for Americans living in Hong Kong to use the foreign earned income exclusion. Your H&R Block tax advisor can confirm the best path for you.
Your Hong Kong pension is not tax-free in the United States. If you participate in a Mandatory Provident Fund (MPF) through your employer, you can deduct your contributions from your Hong Kong taxes. However, your contributions are not deductible, and your employer’s contributions are taxable for U.S. tax purposes.
Hong Kong tax filing considerations for U.S. expats
As an American working in Hong Kong, you may have to pay Hong Kong taxes. Here at H&R Block, we dedicate our expertise to U.S. taxes. If you have questions specific to your Hong Kong tax return, it’s best to speak to an expert on local Hong Kong taxes.
Your Hong Kong taxes are based on income earned within its borders vs. your residency. As an expat in Hong Kong, you’re taxed on any Hong Kong sourced employment income, pension income and business profits and rental income derived from there. That said, it doesn’t matter if you’re a nonresident except in certain limited circumstances.
The income tax rates range from 2% to 17%. Similar to taxes in the U.S., the percentage of tax that you pay increases as your income increases. However, Hong Kong tax rates are much lower than U.S. tax rates, meaning many U.S. citizens working in Hong Kong would pay less in tax locally than in the U.S.
2022-2023 Tax Rates
|Tax rate||Taxable Income|
|2.00%||HK$ 0 – HK$ 50,000|
|HK$ 1,000 plus 6.00%||HK$ 50,001 – HK$ 100,000|
|HK$ 4,000 plus 10.00%||HK$ 100,001 – HK$ 150,000|
|HK$ 9,000 plus 14.00%||HK$ 150,001 – HK$ 200,000|
|HK$ 16,000 plus 17.00%||HK$ 200,001 –|
The tax year is different than in the United States. The Hong Kong tax year starts April 1 each year and ends on March 31 the next year. You’ll need to file your taxes within one month after the Inland Revenue Department issues your individual tax return, which is usually in early May.
As your U.S. tax documentation and reporting generally follows a calendar year, you may need to combine your pay stubs and other payment records complete your U.S. tax return.
How to file a U.S. tax return from Hong Kong
Need to file a U.S. tax return from Hong Kong? Here’s how to file your U.S. expat taxes online:
- Head on over to our Ways to File page
- Pick your journey—in the driver’s seat with our online DIY tool or letting a Tax Advisor take the wheel.
- Once you’re through your chosen journey, you review your return and pay
- We file your return with the IRS
- You sit back knowing your taxes were done right
How H&R Block can help U.S. citizens working in Hong Kong
Are you a U.S. citizen living in Hong Kong? H&R Block Expat Tax Services is here to help you get your U.S. taxes in order. With multiple ways to file, we’ve got a tax solution for you. Get started with our made-for-expats online expat tax services today!
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