Holiday journey benefits granted by employers are assessable under Section 9(2A)(c) of Hong Kong Inland Revenue Ordinance.

The assessable amount is the actual cost incurred by the employer in providing the benefit to the employee and / or his family members.

The Ordinance provides that the charge of tax is irrespective of the following factors: (1) Whether or not the benefit is convertible into cash; (2) Whether the primary liability for the benefit is the employee’s own; (3) Whether or not the benefit will add additional cost to the employer.

The payment for the relocation of an employee and his family to Hong Kong on commencement of employment or for the relocation of an employee out of Hong Kong is not taxable.

To put it simply, the amount taxable is the amount paid by the employer in connection with the benefit. This includes the cost of the air tickets, hotel accommodation, traveling, food, package-tour fee, etc.

Only “holiday journey” benefits are taxable. All expenses in connection of business journey are exempt. Business journey means the employees travelling is required by his employer to perform his duties. If a trip is substantially for business purpose, even though part of the trip is for non-business purpose, the whole journey will be exempt. However, if the non-business portion is significant and can be clearly identified, the expenses attributable to the non-business portion will be ascertained and taxable.

Source：Hong Kong Inland Revenue Department’s website

- https://www.ird.gov.hk/eng/pdf/dipn41.pdf

Download： Hong Kong Salaries Tax – Holiday Journey Benefits [PDF]