Following our article about special tax regimes in Europe, we would like to introduce you some Asian countries that offer favourable tax conditions to their tax resident individuals as well.
Thailand
Tax residents of Thailand are taxed on their income from a source in Thailand. Foreign income received by an individual outside Thailand is taxable if it was transferred to Thailand in the year in which it was earned (the repatriation of capital in subsequent years is not subject to personal income tax in Thailand). The available deductions for reducing the tax base, as well as the tax rate, can be viewed on the website of the local tax authority.
Singapore
In Singapore the territorial principle of taxation applies, under which only that incomes that are received or are considered to be received in the territory of Singapore is a subject of a local tax. Foreign income of individuals that have not been transferred to Singapore and doe not meet other criteria to be considered “received in Singapore” is not subject to taxation. Also, in Singapore personal income tax is not levied on dividends received from Singapore companies (the so-called “single-tier tax system” operates) and there is no capital gains tax. For more information, please, see our previous article.
Hong Kong
Hong Kong, like Singapore, is a classic example of a jurisdiction that applies the territorial principle of taxation. Accordingly, only the income earned by a resident in Hong Kong is taxed. In addition, Hong Kong does not tax dividends, interest and capital gains. For more information about the territorial principle, follow the link.
Malaysia
Malaysia exempts foreign income of individuals from personal income tax. A resident individual pays taxes only on income from a source in Malaysia, regardless of whether such income was earned in cash or in kind. Malaysia has entered into double taxation agreements with most of the countries of the world, so that residents of Malaysia can claim a refund of the tax paid outside the country on foreign income.
China
The special economic zone of China – Shenzhen – is known to many people. Being the industrial area, the special zone offers to companies registered in it a reduced income tax rate. However, few people know that in the middle of last year, Shenzhen authorities announced the introduction of a reduced tax rate for individuals – 15%. To take advantage of the reduced rate, a foreign individual must be employed in Shenzhen and meet the criteria of “high-end scientific and technological talents”.
