Taxation Tutorial 2011/12

CC3155 Taxation Tutorial 1 (2009/10 Semester 1) Suggested Answers to Tutorial Questions (Lecture 1) Overview of the Hong Kong Tax System and Administration A) Quiz 1. 2. 3. 4. 5. 6. 7. 8. F T T T F T E The chargeable person a) Salaries tax: person who has income from employment, office or pension deriving from HK, b) Property tax: owner of land/buildings in HK, and c) Profits tax: person who carries on a trade, profession or business in HK. 9. April 1st, March 31st, April 1st 2008, March 31st 2009. 0. (a & b) 2007/08; (c & d) 2008/09. B) Essay Questions 1. The characteristics (features) of Hong Kong tax system are: †¢ Territorial Source Concept †¢ Schedular tax system †¢ Direct assessment †¢ Limitation to the standard rate †¢ Low tax rates †¢ No capital gains tax †¢ No tax on dividend income 2. The following bodies are involved in the administration of income taxes in Hong Kong: †¢ Inland Revenue Department (IRD) †¢ Board of Inland Revenue (BIR) †¢ Board of Review (BoR) 3.The source of Hong Kong tax law comprises: †¢ Statute law †¢ Case law 1 CC3155 Taxation ______________ 4. Tutorial Answer 1 (2008/09 Semester 1) Composition BIR: consists the Financial Secretary and 4 other members, appointed by the Chief Executive. The CIR is one of the members and a DCIR is the secretary of the BIR. BoR: consists of a chairman and a number of deputy chairman and not more than 150 other members, all of whom are appointed by the Chief Executive (s65). Functions BIR: To make rules called Inland Revenue Rules (IRR) †¢ To specify the forms (e. g. composite tax return) which are necessary for carrying out the provisions of the IRO †¢ To prescribe the procedure to be followed when appealing to the BoR with effect from Jun13,1997 BoR: †¢ To hear taxpayers’ appeals against the CIR’s or DCIR’s determination, s82A additional tax and penalty †¢ To approve CIR’s application for the taxpayer to file a statement of assets and liabilities under s51A(1). 2