T5 - BUSI 0018 Hong Kong Taxation Tutorial Questions Unit 5...

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TQ_U5_SalariesTax(3) 1 BUSI 0018 – Hong Kong Taxation Tutorial Questions Unit 5 – Salaries Tax (3) Question 12 During the year ended 31 March 2008, Mr. Chan was employed as a medical officer by a private hospital. He received a monthly salary of $60,000 and was provided with quarter free of rent. In May 2007, he was elected to be a Council member of the Tsuen Wan District Council. He received a monthly honorarium of $20,000. In his salaries tax return for the year of assessment 2007/08, Mr. Chan claimed for tax deductions the following expenses: 1. $1,800: annual membership subscription to the medical professional association in HK. 2. $1,500: annual membership subscription to the medical professional association in UK. 3. $8,000: removal cost from his previous residence to hospital quarter. 4. $12,400: cost of petrol consumed on travelling in his private car between his quarter and the hospital. 5. $60,000: one month's salary paid on 31 March 2008 to the hospital in lieu of an adequate notice of resignation. He left the hospital with effect from 1 April 2008 and started his private practice in May 2008. 6. Expenses in relation to the District Council (not reimbursed by the Government): $60,000: rent for the office used for handling District Council's affairs, and $24,000: salaries for his part-time secretary working in his office. Required: (a) Explain the rules governing the deduction of outgoings and expenses for salaries tax purposes. (b) Comment with reasons whether or not Mr. Chan would succeed in his claim for deductions.
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TQ_U5_SalariesTax(3) 2 Question 13 Mr. Man has been working for a trading company as a sales manager for many years. His current monthly salary is $20,000. With effect from 1 April 2006, his employer provided him with a flat, for which he has to pay a nominal rent of $1,000 per month to the company. On 1 April 2006, Mr. Man was married with Miss Poon.
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T5 - BUSI 0018 Hong Kong Taxation Tutorial Questions Unit 5...

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