ACY3161ass2_1112_1st_Answer-1

ACY3161ass2_1112_1st_Answer-1 - THE CHINESE UNIVERSITY OF...

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THE CHINESE UNIVERSITY OF HONG KONG School of Accountancy ACY 3161 – Taxation (1 st Term, 2011-2012) Assignment 2 Solution Question 1 Hong Kong salaries tax is charged on income from employment, office or pension 'arising in or derived from' Hong Kong. To consider the source of employment, it is necessary to refer to the Goepfert case on which the IRD states in its DIPN no.10 that the following 3 factors are relevant: 1) The place where the employment contract was negotiated, concluded and enforceable; 2) The place of residence of employer; 3) The place where the remuneration of employee is paid. The IRD will look beyond the above three factors where in reality the employment is a Hong Kong employment but manipulation exits. In the case of Mr. Lam, factor 1 is inconclusive since his employment contract was executed in the UK, but was negotiated and enforceable in Hong Kong. Regarding factors 2 and 3, his employer is resident in Hong Kong and also the place of payment of remuneration is in Hong Kong. After weighing the 3 factors, it is considered that the employment of Mr. Lam should be located in
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This note was uploaded on 02/04/2012 for the course ACCT 3161 taught by Professor Kwong during the Spring '11 term at CUHK.

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ACY3161ass2_1112_1st_Answer-1 - THE CHINESE UNIVERSITY OF...

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