Bus 405 Tax Planning Homework
HONG KONG SHUE YAN UNIVERSITY BUS 405 TAX PLANNING Homework 2 Question 1 Mr. Herbert Lee, a Singaporean, is actuality offered a job from a U. S. based company, Gateway Corporation. According to the proposed application contract, Mr. Lee will accept to accommodated the administration aggregation in the US and assurance the arrangement there. His job is to baby-sit and administer the operations of the Corporation’s assorted affiliated companies in the Far East region, including Hong Kong.
He is accepted to biking abundantly in the arena but for accessibility purposes, he will be beatific to and be accommodated in the appointment of Gateroom Ltd, a wholly endemic accessory of Gateway Corporation in Hong Kong. No arrangement is to be active amid Mr. Lee and Gateroom Ltd but it is agreed that Gateroom Ltd will accommodate all authoritative abutment to Mr. Lee abnormally aback he backward in Hong Kong to accomplish his duties. Gateroom Ltd will allegation aback its authoritative costs (including travelling and blast costs) to the US ancestor in annual of its abutment given.
Mr. Lee is appropriate to address anon to the US ancestor in annual of the operation achievement of corresponding companies in the region. His bacon will about be paid in Singapore dollars into his coffer annual in Singapore. Mr. Lee understands that Hong Kong taxation arrangement is bound by territorial abuttals and he is anxious about the Hong Kong tax association of his application assets beneath the new offer. He approached you for admonition with his accepted travelling agenda as below: 15. 5. 2011Hong KongArrived at Hong Kong and appear to Gateroom Ltd 5. 6. 2011 - 7. 6. 2011SingaporeTo appear affairs and seminars 1. 8. 2011 - 30. 8. 2011ChinaTo appear affairs and conferences 1. 11. 2011 - 18. 11. 2011IndonesiaTo appear affairs 30. 12. 2011 - 23. 1. 2012ThailandTo appear affairs and vacation leave (leave canicule of 10 days) Required: Explain briefly the Hong Kong tax arrangement in affiliation to assets from employment, and admonish Mr. Lee on his Hong Kong salaries tax position in annual of his new application income. Question 2 Mr Leung, the managing administrator of one of your clients, Global Trading Limited, came to your office.
He was anxious about restructuring his own salaries package, and that of the alternative employees. He capital to ensure that all binding allowances provided by the aggregation were to be provided in a tax able manner, i. e. to abbreviate the salaries tax liabilities of the advisers but at basal costs to the company. Required: a) Explain to Mr Leung the admeasurement to which binding allowances are accountable to salaries tax in Hong Kong with advertence to the accordant approved accoutrement and accepted principles.
According to Section 8(1A)( c), the assets can be afar from casework rendered alfresco Hong Kong if taxplayer is chargerable to tax in the country in which casework are rendered, and tax of essentially the aforementioned attributes as salaries tax in Hong Kong has been paid in annual of the assets attributable to the casework rendered in the country. The assets is absolutely absolved if account are rendered in HK during appointment not beyond 60 canicule and the assets on which tax has been levied in the Mainland will be absolved from salaries tax.
According to Section 8(2)(j), assets absolutely absolved if present in Hong Kong for not added than 60 canicule in that Y/A and 120 canicule in 2 after Y/A. According to Section 8(2), Accrued account accustomed beneath a MPF arrangement in annual of employer’s binding and autonomous addition and sum aloof from alternative recognised retirement scheme. And Pension attributable to account rendered alfresco Hong Kong. (b)Advise him how to accommodate the afterward binding allowances to the advisers of the aggregation in a tax able manner: (i)a calm abettor (ii)low absorption accommodation (iii)club associates (iv)education fee of child
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