Tax Reduction through Personal Assessment

Personal assessment may provide relief for you if you have income that is chargeable to profits tax and/or property tax. This article explains who is eligible for personal assessment, how election may reduce your overall tax liability, how married couples are treated under it, online help in computing your tax payable under personal assessment, and where to go if you want to know more.

What is Personal Assessment

The Inland Revenue Ordinance provides for the levying of three separate direct taxes – salaries tax on income from office, employment and pension, profits tax on business profits and property tax on income from properties. Personal assessment may reduce the tax payable by individual taxpayers who have to pay profits tax and/or property tax. If your only income is chargeable to salaries tax, you will not benefit from electing for personal assessment.

Hong Kong residents can elect for personal assessment if they consider it will reduce their tax liabilities. You need only complete Part 7 of your Tax Return – Individuals (BIR60) or submit an application form (IR76C) within the prescribed time limit. More details on eligibility for personal assessment and the prescribed time limit for election are available through the following link.

Further information about eligibility for personal assessment

Can Personal Assessment Reduce My Tax Liability

If you are a sole proprietor, a partner in a business or a property owner, you can elect for personal assessment if you are eligible. This may help to reduce the tax you need to pay by aggregating your assessable income under salaries tax, profits tax and property tax, and making adjustments for the deductions.  The balance, if any, will be taxed at the same rates as those used for salaries tax.

More on how personal assessment can reduce your tax liabilities

Treatment of Married Couple under Personal Assessment

For a year of assessment up to 2017/18, if you are married and are not living apart from your spouse, and both of you have income assessable to tax, election for personal assessment must be jointly made by you and your spouse. Separate taxation for a married couple is not applicable under personal assessment for a year of assessment up to 2017/18.

From the year of assessment 2018/19 onwards, a married person may elect for personal assessment separately from or jointly with his/her spouse. If you elect for personal assessment jointly with your spouse, both of you and your spouse must have income assessable to tax. If you and your spouse are jointly assessed under Salaries Tax, election for personal assessment must be made by you and your spouse jointly.

More on the treatment of married couple under personal assessment

Computing the Amount of Tax Payable under Personal Assessment

A simple Tax Calculator is available online to assist you to work out how much tax you will need to pay. More information on how to use the Tax Calculator and what you need to consider when computing the tax payable under personal assessment is available through the following link.

How to compute the amount of tax payable

Further Information

You can access frequently asked questions and have more information about personal assessment through the following links.

Frequently asked questions about personal assessmentA brief guide to personal assessment (pdf file)
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Last review date: July 2023