4. Is the lump sum received by way of commutation of pension (replacing the monthly pension) on my retirement taxable? On the other hand, is monthly pension taxable?
In general, any sum received by way of the commutation of a pension to certain Government officials or civil servants under the Pensions Ordinance (Cap. 89 of the Laws of Hong Kong), the Pension Benefits Ordinance(Cap. 99), or the Pension Benefits (Judicial Officers) Ordinance (Cap. 401) is NOT taxable.
If you were employed in the private sector, the monthly pension received by you after retirement is considered similar to your monthly salary and is taxable if it is sourced in Hong Kong . However, there is no Hong Kong court decision on the source of Hong Kong pensions although in practice this is normally decided by the place where the fund from which the pension is payable is managed and controlled. (Note: Where a pension is partly attributable to past services rendered outside Hong Kong , a proportion of the pension is exempt.)