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I was recently offered a job in Hong Kong. I am an american

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citizen and I would have...
I was recently offered a job in Hong Kong. I am an american citizen and I would have a work visa if I accepted. The recruiter told me that it's an excellent financial opportunity because of the money that I would save on taxes. What is the difference between US taxes and Hong Kong taxes for someone in my situation?
Submitted: 6 years ago.Category: Tax
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Answered in 58 minutes by:
4/2/2011
Tax Professional: Lev, Tax Advisor replied 6 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,663
Experience: Taxes, Immigration, Labor Relations
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Hi and welcome to Just Answer!

The recruiter was correct that Hong Kong taxes are relatively low - with maximum tax rate on wages - 20% (compare with 35% in the US) and temporary was reduced to 17% - http://www.ird.gov.hk/eng/pdf/pam61e.pdf

You can estimate your annual Hong Kong taxes using this calculator - http://www.guidemehongkong.com/taxation/topics/hong-kong-tax-calculator

 

As US citizen - you are required to report all your worldwide income, but because you will be living abroad - you might be entitled for a foreign earned income exclusion. That exclusion is not granted automatically - you need to file your tax return to get it.

For the person to qualify for the foreign earned income exclusion - he/she should:
-- Work and reside outside the United States for at least 330 days during the year(Physical Presence test), or
-- Meet either the Bona Fide test.
If the person qualifies, he/she may exclude up to $91,500 (in 2010) in foreign wages -- plus housing allowances. Here are forms you likely need: Form 2555 Instruction 2555

Please also see for reference this publication - www.irs.gov/pub/irs-pdf/p54.pdf

 

Let me know if you need any help or clarification.

Lev
Lev, Tax Advisor
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