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Unformatted text preview: 14 edition Example 19-1 Miss Chan is a sole prorietor and has no other income. She receives a profits tax assessment for the year of assessment year 0 on 1 October year 1 . If she does not object to the profits tax assessment, the time limit for her to elect for PA for year 0 is the later of: 31 March year 2 (ie two years after the end of the year of assessment 2008/09); and 1 December year 1 (ie one month after the profits tax assessment has become final and conclusive under s 70). Example 19-2 Mr Levy is a US citizen who normally resides in the US. He derives rental income from letting a property in Hong Kong. During the years ended 31 March year 0 and 31 March year 1, he spent 90 days and 220 days in Hong Kong respectively. Though he stayed in Hong Kong for not more than 180 days in the year of assessment year 0, he is eligible to elect for PA for that year because he stayed in Hong Kong for more than 300 days in the two consecutive years of assessment year 0 and year 1. He is also eligible to elect for PA for the year of assessment year 1 because he stayed in Hong Kong for more than 180 days in that year. Example 19-3 Miss Yip donated three television sets, costing $30,000 in total, to Po Leung Kuk. Even though the donation is over $100, Miss Yip cannot claim the donation because the donation is NOT in cash Example19- 4 Mr Chan is single. In year of assessment year 0, he has a net assessable income for salaries tax of $160,000. His net assessable income was $120,000 after the deduction of an approved charitable donation of $40,000 . He is also the sole proprietor of a business which has an assessable profit of $100,000 after the deduction of a charitable donation of $20,000 . He has not yet claimed for a charitable donation of $30,000 . He has no other income or loss. The total amount of approved charitable donation made by Mr Chan is $90,000 (ie $40,000 + $20,000 + $30,000). The amount of approved charitable donation that can be claimed by him under PA is computed as follows: Mr Chan $ $ Net assessable income ( before charitable donation of $40,000) 160,000 Assessable profit ( before charitable donation of $20,000) 120,000 280,000 Less: Approved charitable donation limited to 35% of ($160,000 + 100,000 + 20,000) = $98,000 but limited to 90,000 Less: Amount already allowed under profits tax...
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This note was uploaded on 09/29/2011 for the course ACCT 3161 taught by Professor Kwong during the Spring '11 term at CUHK.
- Spring '11