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Taxation without representation is tyranny …Budget reflections

July 6, 2009

When writing about tax the most frequently used quotation is that from Benjamin Franklin, “But in this world nothing can be said to be certain, except death and taxes.” However, reflecting on Hong Kong’s budget, the most apt quotation must surely be that from James Otis, “Taxation without representation is tyranny.”
Following the reading of the [...]

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The Cost of A Tax Appeal – The IRD Knows It!

July 6, 2009

Hong Kong’s objection and appeal procedures against tax assessments raised by the Inland Revenue Department (“the Department”) can be costly should a taxpayer wish to pursue his right of objection.
Firstly, if a taxpayer wishes to appeal against an assessment, he may be required to purchase a tax reserve certificate (“TRC’s”). Notwithstanding that it is estimated [...]

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The Inland Revenue Department Seek to Penalise Delinquent Tax Filing

June 29, 2009

The Inland Revenue Department (’the Department) has recently issued a number of Form IR 1254 letters advising the recipient that, “According to our information, you have failed to file your tax return by the due date.”
The letter then continues, “If the Department had not detected the failure, tax would have been undercharged.”
The Department then points [...]

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Tax Free Perks for All

June 26, 2009

I was delighted to receive a question from a reader of my ‘Rants’.  I have to admit that I was more surprised to learn that people read my blog rather than the fact that people would like to have questions answered.
The reader rightly enquired whether Government employees/ legislative councilors clearly using Government vehicles for their [...]

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Hidden Taxes

June 23, 2009

By this time of year I have normally filed my salaries tax return and have calculated the amount I will have to pay next January.  At first blush it may not seem to be a significant percentage of my earnings however the reality is that the salaries tax we all pay is only part of [...]

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Hong Kong is NOT a Tax Haven

April 20, 2009

The Government has clearly stated that it will enact legislation to amend the Inland Revenue Ordinance in order to allow the Inland Revenue Department to share information with overseas tax authorities, in other words acceding to the demands of the Organisation for Economic Co-operation and Development (OECD) to sign up to international agreements facilitating tax [...]

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The fight for offshore profits claims continues

April 14, 2009

For many years Hong Kong manufacturing companies have taken advantage of the considerably lower labour costs in other Asian countries, particularly Mainland China.  Inevitably the nature of these arrangements varies but a large number of enterprises have established their own manufacturing/assembly plants in Mainland China.
Structured correctly, such arrangements may also reduce the tax burden of [...]

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Structuring your remuneration in a tax efficient manner

April 2, 2009

Are you paying too much salaries tax? The Inland Revenue Ordinance provides employers with the opportunity to legally structure employees’ contracts of employment in a tax efficient manner, but how many make the effort?
Whilst the following is not an exhaustive list of benefits it nonetheless illustrates how a remuneration package can be structured.
The starting point [...]

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Can a taxpayer rely on the Inland Revenue Department?

March 30, 2009

For many years taxpayers have relied on the Inland Revenue Department’s Departmental Interpretation Practice Notes (“DIPN”). Indeed, these have proved to be extremely helpful and have frequently assisted taxpayers understand how the provisions of the Inland Revenue Ordinance are to be interpreted. However, on the front of each DIPN it is stated that;
“These notes are [...]

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Budget Proposal

February 18, 2009

In the past few days there has been media coverage of the proposal to suspend provisional tax and to introduce a one year subsidy of HK$2,000 per month for those persons hiring graduates from Hong Kong universities. Sadly, I doubt whether there is time to introduce additional proposals into next Wednesday’s Hong Kong Budget but, [...]

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