# are 1st yr income taxes due upon moving to HK



## Dawei (Jul 22, 2013)

I'll be moving to HK in a few months with a company who has never relocated an american there, but on one of my recent trips to HK I was working with some property agents and talking about my dream to move there and they told me that when someone relocates to Hong Kong that they need to pay their anticipated first year's income taxes upfront, sort of as a barrier to entrance to keep immigration down. What have your experiences been with income taxes as an expat living in HK?

I've traveled to HK over 20 times on business and know I will love living there, but want to make sure I fully understand all of the financial costs before I get to the point of discussing a relocation package, lest I short myself.

Thanks,
David, AKA: DaWei


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## franjelley (Jul 22, 2013)

there is no double taxation relief agreement between usa and hong kong, (none between hong kong and australia yet either). If there were, you just lodge one form in your place of residence and add overseas income into it but with relief because you declare the tax credit for the 2nd country on that form. So you might end up paying too much tax unless you have lots of deductions from the 2nd country which are justifiable. I understand as an amateur that one form/one country is the norm, and you add other overseas income to that form. that is what i do here in aust with usa income.There is a long sticky about tax on the site and you will no doubt get comfort from that, but it wont be a subject you understand overnight. however, accountants are almost magicians. My father was an accountant who became a clergyman and he taught me a long time ago "you dont have to cheat on your tax, you just learn to understand the rules and work accordingly".
I am sure that sticky will be a big help. I have worked thru this stuff with aust and usa and now just about to work thru it with aust and hkg. its challenging but freedom of information is a wonderful thing.. just keep nagging at IRS and equiv in hkg until you get it.


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## Southerncalm (Jan 3, 2014)

Being from America if you will be in HK more than a year you can quality for the Expat tax credit
I just covered part of this on another link
If you work legally outside of the USA as an American if you follow the guidelines 
the fits $94k or so is tax free from federal taxes
if you live in a state that charges income tax you will still have to pay it
unless you change your residence to a no income tax state before you move
I rented a room at an extended stay motel in Vegas for 3 months
changed my car registration, drivers license and registered to vote in Nevada
was rarely there, but that did not matter
Now zero state income tax on money made outside America
and the first $94k or so is no fed tax
however anything over the $94k is taxed at the full bracket rate of your entire income
there are a few things you have to do the first year or you don't qualify
but there are lots of good expat tax prep companies that can help

cant help you on the other part about HK income tax, but knowing your not gonna double pay up to the $94 should be some help on both sides

Good luck


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