Hong Kong has a beautifully low tax rate and simple taxation structure, which is one reason that Hong Kong is such an attractive place for expats and business entrepreneurs. Here's a simple summary of the personal tax loans available in Hong Kong.
There are many tax loan providers in Hong Kong - at least count there was over 20 companies. Before you decide on a tax loan company, here's some key points you need to consider:
ANNUALIZED PERCENTAGE RATE OR APR
The Annualized Percentage Rate offered by a tax loan company is one of the most important considerations. APR is regulated in Hong Kong by the Hong Kong Monetary Authority's Code Of Banking Practice. The APR should include all handling charges, interest expenses and fees so that it's easier to compare offers from different banks.
There is a wide choice of repayment periods being offered. Make sure you ask for all the details - find out from the very start if there is a fixed replayment plan or if it's a revolving one. And find out what the charges are for late payment. If you want to pay off your loan earlier - see if there is an early settlement penalty.
LOAN PROMOTIONS AND OFFERS
As the competition grows between banks and financial institutions offering bank loans, many companies now offer decent offers and promotions. Some may be gifts, others have vouchers. And there may offer a few months interest-free loans.
Here are just a few of the tax loan companies out there:
WING HANG CREDIT
Wing Hang has 22 branches in Hong Kong and 12 years of experience in providing tax loans. They have a 'Wing Hang Tax Money" promotion which includes a "Lowest Interest Rate Guarantee Plan" in which they offer customers 20% more off than other loan providers in Hong Kong. APR can be as low as 1.92% and you can loan up to 2 million HK dollars or eight times your monthly salary - whichever is lower. If you apply online, you might qualify for a $50 supermarket cash coupon. The maximum loan tenor can be up to 24 months.
If you sign up for a Citi At Work Payroll account or a Citigold account, and you apply successfully for a Citibank Tax Loan at the same time, you can get a full rebate on the tax loan interest and handling fee waiver. The monthly flat rate can be as low as 0.08% with a 6 or 12 month repayment period.
BANK OF CHINA
Bank of China have a 'I-Smart" Tax Loan offer in which their professional team will monitor the tax loan offers from other banks and offer a further 5% off. The difference will be refunded to customers without any supporting documents or any other effort required. They offer a loan amount of up to 2 million HK dollars or up to six times our monthly salary. And the replayment period can go up to 19 months.
DAH SING BANK
Dah Sing Bank has a APR as low as 2.52% with a waiver of handling fees plus up to HK$488 cash rebates under certain conditions. You can borrow up to HK$800,000 or six times your monthly salary whichever is lower.
TAX LOANS IN HONG KONG: OTHER POINTS TO NOTE
In every year of assessment you are entitled to both a basic allowance and potentially other allowances depending on your family situation. Allowances include:
- Child allowance
- Single parent allowance
- Disabled dependent allowance
- Married Person's allowance
- Dependent parent or dependent grandparent allowance
- Dependent brother or dependent sister allowance
CHARITIABLE DONATIONS ARE TAX DEDUCTABLE IN HONG KONG
Donations of HK$100 or above to approved charities can be deducted fomr your net assessable income. The deduction ceiling is 35% (up from 25%).
Note: all data correct at time of writing but may be subject to change at any notice. Information is for guide purposes only - please check with your loan provider for further details.