[Personal Income Tax Systems] A Comprehensive Comparison of Tax Deductions in Hong Kong and Singapore

Hong Kong and Singapore are both renowned as major international financial hubs in Asia, each with its own unique tax system. Among the key aspects to consider when relocating or expanding overseas is the personal income tax deduction system, which directly impacts individuals and businesses.

Following our previous article on “Taxable Income for Personal Income Tax”, this article focuses on the tax deduction systems in Hong Kong and Singapore, highlighting their differences and implications.
*If you want to know the comparison results first, click here.

Hong Kong

Overview of Income Tax Deductions (as of January 2024) (Source: IRD “Salaries Tax/Personal Assessment Allowances, Deductions and Tax Rate Table”)

In Hong Kong, taxpayers are entitled to a basic allowance, with additional deductions available under specific conditions. Recent years have seen the introduction of new deduction categories, such as medical insurance premiums and rental expenses, reflecting continuous adjustments to the tax system.

Personal Allowance Items	Deduction Amount (HK$)
Basic Allowance
Unmarried individuals	132,000
Married individuals (only for taxpayers meeting all the following conditions): ① Lived with the spouse during the tax year, or lived separately but supported or provided financial assistance to the spouse ② The spouse had no taxable income, or the couple opted for joint assessment	264,000
Child Allowance – For the 1st to 9th child (per child) ※ Only applicable to children under 18 years old, those aged 18–24 who are enrolled in a full-time course at an educational institution, or individuals aged 18 or older who are physically or mentally disabled and unable to work
Year of birth	260,000
Subsequent years	130,000
Dependent Parent/Grandparent Allowance (Per Person) (For Eligible Individuals Who Meet All of the Following Conditions) ①The individual usually resides in Hong Kong. ②The individual has lived with the taxpayer for at least six consecutive months and does not need to bear the full cost of living, or the taxpayer or their spouse has provided at least HK$12,000 annually for the support of the parent/grandparent.
Aged 60 or older, or eligible to apply for the Government’s Disability Allowance	50,000
Aged 55–59	25,000
Additional Dependent Parent/Grandparent Allowance (Lump Sum)＊ ※ In addition to the above conditions, the individual must have lived with the taxpayer for the entire assessment year without needing to bear the full cost of living.
Aged 60 or older, or eligible to apply for the Government’s Disability Allowance	50,000
Aged 55–59	25,000
Dependent Sibling Allowance (per dependent) ※ Only applicable to individuals under 18 years old, those aged 18–24 who are enrolled in a full-time course at an educational institution, or individuals aged 18 or older who are physically or mentally disabled and unable to work	37,500
Single Parent Allowance (only for those meeting all the following conditions): ① Did not marry within the tax year ② Was granted at least one child allowance in the tax year	132,000
Disability Allowance ※ Only applicable to individuals receiving the Government’s Disability Allowance	75,000
Dependent Disabled Allowance (per dependent) ※ Only applicable to dependents (spouse/child/parent/grandparent/sibling) who receive the Government’s Disability Allowance	75,000
＊Can choose between Elderly Residential Care Expenses Deduction or Dependent Parent/Grandparent Allowance

Other Deduction Items	Maximum Deduction Amount (HK$)
Self-Education Expenses Deduction (only for designated courses)	100,000
Elderly Residential Care Expenses Deduction (for each parent/grandparent of the taxpayer or spouse) (only for those meeting all the following conditions): *     ① Aged 60 or older, or eligible to apply for the Government’s Disability Allowance     ② The care facility must be located in Hong Kong, legally authorized under Hong Kong law, and the expenses must be paid by the taxpayer or spouse within the tax year	100,000
Home Loan Interest Deduction for a property occupied by the taxpayer (including parking space within the same property)	100,000 (Maximum period: 20 years)
Rental Deduction for a property occupied by the taxpayer (including parking space covered in the lease agreement) ※ Subject to specific eligibility conditions	100,000
Mandatory Provident Fund (MPF) / Government-approved Retirement Scheme Contributions	18,000
Insurance Authority-Approved Annuity Premiums and Voluntary Contributions to MPF	60,000
Voluntary Health Insurance Scheme Premiums (per insured person) ※ The insured person must be the taxpayer, spouse, or designated family member	8,000
Charitable Donations	Up to 35% of taxable income
＊Can choose between Elderly Residential Care Expenses Deduction or Dependent Parent/Grandparent Allowance

Tax Refund Scheme
Hong Kong has implemented a tax refund scheme for personal income tax in recent years. Since FY2018/2019, the government has periodically provided tax refunds, with the maximum refund amount varying based on annual tax policy revisions.

Singapore

There have been several recent changes to the personal income tax relief system in Singapore, with further implementations planned. As an example from the 2023 budget proposal, changes include adjustments to tax relief for working mothers, the removal of the Foreign Domestic Worker Levy Relief, and the enhancement of the Grandparent Caregiver Relief.

List of Income Tax Relief Items (As of February 9, 2024, Reference: IRAS “Tax Reliefs and Rebates“)

Family-Related Items

Personal Income Tax Relief Items	Amounts (S$)
Earned Income Relief ※Applicable if the taxpayer had taxable income from employment, pensions, or trade, business, or profession in the previous year	Below 55 years old at the end of the previous year: 1,000 55 to 59 years old at the end of the previous year: 6,000 60 years old and above at the end of the previous year: 8,000 ※Higher relief is available for individuals with disabilities.
Spouse Relief ※If claiming this relief, the taxpayer cannot claim Parent Relief or Handicapped Parent/Sibling Relief for the same dependent.
If the spouse lives with the taxpayer or receives financial support from the taxpayer and has an annual income of S$4,000 or less	2,000
If the spouse is a person with disabilities and lives with the taxpayer or receives financial support from the taxpayer	5,500
Qualifying Child Relief (Per Child) (Applicable only if all the following conditions are met) ①The child is born to the taxpayer and spouse/former spouse, a stepchild, or a legally adopted child. ②The child is below 16 years old or is enrolled full-time in an educational institution within the assessment year.
If conditions ① and ② are met and the child’s annual income is S$4,000 or less	4,000
If conditions ① and ② are met and the child has disabilities	7,500
Working Mother’s Child Relief (Per Child) (Applicable only to female taxpayers who meet all of the following conditions) ①The taxpayer is a married, divorced, or widowed mother (unmarried women are not eligible). ②The taxpayer had taxable income from employment, pensions, or trade, business, or profession in the previous year. ③The taxpayer has a Singapore-resident child who meets the criteria for Qualifying Child Relief in the previous year.	First child: 15% of earned income Second child: 20% of earned income Third child and beyond: 25% of earned income ※Total relief is capped at 100% of earned income.
Parent Relief (Per Dependent Parent/Grandparent/Great-Grandparent of the Taxpayer or Spouse) (Applicable only if all of the following conditions are met) # ①The dependent is a Singapore Permanent Resident (if a foreigner, must have lived in Singapore for at least 8 months in the previous year). ②The dependent is 55 years old or above with an annual income of S$4,000 or less.
If conditions ① and ② are met and the dependent lives with the taxpayer	9,000
If conditions ① and ② are met and the dependent does not live with the taxpayer but receives at least S$2,000 in financial support annually	5,500
Handicapped Parent Relief (Per Dependent Parent/Grandparent/Great-Grandparent of the Taxpayer or Spouse) (Applicable only if all of the following conditions are met) ①The dependent is a Singapore Permanent Resident (if a foreigner, must have lived in Singapore for at least 8 months in the previous year). ②The dependent is a person with disabilities.
If conditions ① and ② are met and the dependent lives with the taxpayer	14,000
If conditions ① and ② are met and the dependent does not live with the taxpayer but receives at least S$2,000 in financial support annually	10,000
Grandparent Caregiver Relief (One Claim Per Taxpayer) (Applicable only to female taxpayers who meet all of the following conditions) ①The taxpayer is a married, divorced, or widowed working mother (unmarried women are not eligible). ②The dependent (A parent or grandparent of the taxpayer or the taxpayer’s spouse/former spouse, the “caregiver” as below) must be meeting all of the following conditions: 　・A Singapore resident in the previous year (if a foreigner, must have lived in Singapore for at least 8 months). 　・Caring for a Singapore-resident child of the taxpayer who is 12 years old or younger, or a disabled unmarried child. 　・Earning S$4,000 or less in the previous year from employment, pensions, or trade, business, or profession. ※Only one taxpayer can claim this relief for the same caregiver.	3,000
Handicapped Sibling Relief (Per Dependent Sibling of the Taxpayer or Spouse) (Applicable only if either of the following conditions is met) ①The dependent lives with the taxpayer; or ②The dependent does not live with the taxpayer but receives at least S$2,000 in financial support annually.	5,500
Foreign Domestic Worker Levy Relief (One Claim Per Worker) (Applicable only to female taxpayers who meet all of the following conditions) ①The taxpayer or the taxpayer’s spouse employed a foreign domestic worker in the previous year. ②In the previous year, the taxpayer was: 　・Married and living with the spouse; or 　・Married but with a spouse who is not a Singapore tax resident; or 　・Not living with a spouse, divorced, or widowed, with a qualifying child living together.	2 times the levy paid for the foreign domestic worker in the previous year.
#: The maximum number of dependents that can be claimed under Parent Relief and Handicapped Parent Relief is two. Spouse Relief or Handicapped Sibling Relief cannot be claimed for the same dependent if Parent Relief or Handicapped Parent Relief has been claimed.

Insurance, Savings, and Education-Related Items

Deductible Items	Amounts (S$)
Life Insurance Relief (For Taxpayers Who Meet All of the Following Conditions)＃ ①The total amount of mandatory CPF contributions as an employee, mandatory Medisave contributions, and voluntary CPF contributions as a self-employed person is less than S$5,000. ②The taxpayer has paid life insurance premiums for themselves (for married men, premiums paid for their wife’s life insurance are also applicable). ③The insurance company has a branch in Singapore.	The lower of the following: ・The difference between CPF contributions and S$5,000, or ・Up to 7% of the sum insured or the premiums paid for the taxpayer or spouse.
Course Fee Relief (For Courses Taken in the Previous Year That Meet Any of the Following Conditions)＊ ①Courses, seminars, or conferences leading to academic, professional, or vocational qualifications approved by ACRA. ②Courses, seminars, or conferences related to the taxpayer’s current employment, trade, business, or profession. ③Courses, seminars, or conferences taken between January 1, three years ago, and December 31, two years ago, that became relevant to the taxpayer’s employment, trade, business, or profession in the previous year.	Actual expenses for computer course certification fees, examination fees, enrollment fees, and tuition fees, up to a maximum of S$5,500 per year.
Supplementary Retirement Scheme (SRS) Relief Not applicable if: ・The SRS account was closed as of December 31 of the contribution year. ・The same amount contributed was also withdrawn in the same year.	The amount contributed.
CPF Retirement Sum Topping-Up Scheme Relief ※ Applies to Special Account (for recipients under 55), Retirement Account (for recipients 55 and above), and Medisave Account.
If the recipient is the taxpayer themselves	If total top-up amount is less than S$8,000: The actual top-up amount is deductible. If total top-up amount is S$8,000 or more: The maximum deductible amount is S$8,000.
If the recipient is one of the following relatives: 　①Parents or grandparents of the taxpayer or their spouse. 　②A physically or mentally disabled spouse or sibling. 　③A spouse or sibling whose annual income was S$4,000 or below two years ago.	If total top-up amount is less than S$8,000: The actual top-up amount is deductible. If total top-up amount is S$8,000 or more: The maximum deductible amount is S$8,000.
＃: Exclusions: Disability insurance, Hospitalization insurance, Health insurance (e.g., MediShield, Integrated Shield Plans), Long-term care insurance (e.g., ElderShield, CareShield Life), Life insurance riders (e.g., total and permanent disability riders, critical illness riders, premium waiver riders), Critical illness insurance, Endowment insurance ＊: Exclusions from Course Fee Relief: Courses, seminars, or conferences related to recreation, leisure, hobbies, or general knowledge/skills (e.g., photography, language learning, sports, social media skills, basic website development, Microsoft Office skills). ＊: Polytechnic and university courses are not eligible if the taxpayer has never been employed (except for vacation part-time jobs and internships) or has never engaged in trade, profession, or business.

Additionally, there are other relief items such as rental expense relief, charitable donation relief, work-from-home expense relief, CPF relief for employees and self-employed individuals, and National Service relief for taxpayers, their spouses, and their parents. The total amount of relief across all applicable items is capped at S$80,000.

Tax Rebates
The Singapore government provides tax rebates in line with its policies. As of February 9, 2024, there are two types of rebates that are currently in effect or have been applied in the past: Parenthood Tax Rebate and Personal Tax Rebate.

・Parenthood Tax Rebate
Married, divorced, or widowed parents can claim a one-time tax rebate of up to S$20,000 per child (including legally adopted children). The rebate amounts are as follows:

Child Order	Tax Refund Amount (S$)
First Child	5,000
Second Child	10,000
Third Child and Beyond	20,000

・Personal Tax Rebate
Personal tax rebates are not granted every year, and in recent years, they were only implemented in 2017 and 2019.

Comparison

When comparing both systems, the following differences can be observed. Please refer to these when considering relocation or business expansion:

Basic Allowance and Earned Income Relief
Hong Kong: Basic allowance is HK$132,000. Married taxpayers can claim double the amount (HK$264,000) if their spouse has no taxable income or if they file a joint tax return.
Singapore: The amount varies based on age and physical/mental health condition. For non-disabled individuals, the relief ranges from S$1,000 to S$8,000.

Child Relief
Hong Kong: There is a limit of up to 9 children who can be claimed. If eligible, the relief amount is the same for all children (HK$260,000 in the birth year. HK$130,000 annually thereafter.)
Singapore: No limit on the number of children who can be claimed. The relief amount depends on the child’s income and physical/mental health condition. Currently, two relief amounts apply: S$4,000 or S$7,500.

Dependent Parent/Grandparent Relief (Per Person)
Hong Kong: If the cohabitation requirement is met, the relief amount doubles to a maximum of HK$100,000. Only one taxpayer can claim per dependent, but there is no limit on the number of dependents that can be claimed.
Singapore: There is a limit of two dependents per taxpayer. The relief amount varies based on the dependent’s physical/mental health condition and whether they live with the taxpayer. The relief ranges from S$5,500 to S$14,000.

Disability Relief (Per Person)
Hong Kong: Disability relief is a separate item added to the total deduction amount. The relief amount is a fixed HK$75,000.
Singapore: Additional disability relief is included within each specific deduction category, rather than as a separate item. The amount of additional relief varies by category, so taxpayers must check the specific requirements for each category.

Personal Tax Refunds
Hong Kong: Conducted annually in recent years.
Singapore: Only in the 2017 and 2019 tax years.

Tax Deductions Unique to Hong Kong and Singapore
Hong Kong: Elderly care facility deduction, Additional deduction for widows/widowers, Deduction for mortgage interest or rent on the taxpayer’s residence (including parking spaces within the same property)
Singapore: Grandparent caregiver relief, Foreign domestic worker levy relief, Life insurance relief, Working mother child relief

Summary

From the perspective of personal income tax deduction systems, Hong Kong may be more attractive to individuals and families who prioritize simplicity and minimizing tax burden. Clear deduction criteria and relatively uniform deduction amounts simplify the tax planning process for residents.

On the other hand, for those with specific needs related to childcare, elderly care, or disabilities, Singapore offers a more flexible tax deduction system.

Each country reviews its tax policies annually in its budget plans, adjusting taxable income criteria and deduction details accordingly. Before deciding on relocation or expansion, it is essential to stay updated on the latest tax policies.

We recommend consulting tax professionals to determine the best location for relocation or business expansion based on your individual circumstances and financial goals.