Mr. Hong supplies you with the following information relating to the year ended 31 March 2020:...

  

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Mr. Hong supplies you with the following information relating to the year ended 31 March 2020: a) He was employed by Octagon Company Limited ("OCL"), a company incorporated, managed and controlled in Hong Kong. At all-time during the year of assessment, his payroll costs were borne by OCL. According to the terms of employment, the monthly salary of Mr. Hong was $90,000. He was required to station in the factory at Shunde, Mainland China to take charge of the administration and operations from Monday to Friday during a week. b) He came back to Hong Kong and stayed with his family during the weekend. Occasionally, he also came back to OCL's office in Hong Kong during weekdays. During the days he was in Hong Kong, Mr. Hong admitted that he had picked up foreign clients at train station, arranged factory visit with clients in Shunde, accompanied foreign clients to airport and accompanied foreign clients for visa renewal. That factory was owned by Company X, which was a wholly owned subsidiary of OCL. (11 marks) c) His wife worked for an Australian based company specialized in trading engineering parts and products. Her employment contract was concluded in Melbourne, Australia. Her job is to represent the interests of the Australian company in the Asia regions where it has subsidiaries. She is paid by the office in Hong Kong, in Hong Kong dollars. Her payroll costs were charged back to her employer in Melbourne. During the year, she spent 155 days in Hong Kong and out of the days she stayed in Hong Kong, she had 20 days as her vacation leave. Her salary for the year was $830,000. (9 marks) Required: Explain whether the above income is subject to salaries tax in Hong Kong. If so, to what extent will the assessable income be? Mr. Hong supplies you with the following information relating to the year ended 31 March 2020: a) He was employed by Octagon Company Limited ("OCL"), a company incorporated, managed and controlled in Hong Kong. At all-time during the year of assessment, his payroll costs were borne by OCL. According to the terms of employment, the monthly salary of Mr. Hong was $90,000. He was required to station in the factory at Shunde, Mainland China to take charge of the administration and operations from Monday to Friday during a week. b) He came back to Hong Kong and stayed with his family during the weekend. Occasionally, he also came back to OCL's office in Hong Kong during weekdays. During the days he was in Hong Kong, Mr. Hong admitted that he had picked up foreign clients at train station, arranged factory visit with clients in Shunde, accompanied foreign clients to airport and accompanied foreign clients for visa renewal. That factory was owned by Company X, which was a wholly owned subsidiary of OCL. (11 marks) c) His wife worked for an Australian based company specialized in trading engineering parts and products. Her employment contract was concluded in Melbourne, Australia. Her job is to represent the interests of the Australian company in the Asia regions where it has subsidiaries. She is paid by the office in Hong Kong, in Hong Kong dollars. Her payroll costs were charged back to her employer in Melbourne. During the year, she spent 155 days in Hong Kong and out of the days she stayed in Hong Kong, she had 20 days as her vacation leave. Her salary for the year was $830,000. (9 marks) Required: Explain whether the above income is subject to salaries tax in Hong Kong. If so, to what extent will the assessable income be?

Answer rating: 100% (QA)

Answer IBoth Mr Hong and his wifes income is subject to salaries Tax Stepbystep explanation i Indivi... View the full answer