Taxation Tutorial 2011/12

Suggested Answers to Tutorial Questions (Lecture 1)Overview of the Hong Kong Tax System and AdministrationA) Quiz1.

FTTTFTEThe chargeable persona) Salaries tax: person who has income from employment, office or pension deriving from HK,b) Property tax: owner of land/buildings in HK, andc) Profits tax: person who carries on a trade, profession or business in HK. 9. April 1st, March 31st, April 1st 2008, March 31st 2009.10. (a & b) 2007/08; (c & d) 2008/09.B) Essay Questions1.

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


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)


The source of Hong Kong tax law comprises:• Statute law• Case law




Tutorial Answer 1 (2008/09 Semester 1)

CompositionBIR: 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).FunctionsBIR:• 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 Jun13,1997BoR:• 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).