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s51: Taxpayer's obligations
- To complete returns within the time limit as requested in the notice from an assessor in writing.
- To notify the CIR in writing, of his chargeability to tax, not later than 4 months after the end of the basis period in which the income was derived.
- To furnish a fuller or further return as may be requested.
- To provide information which may affect the tax liabilities of any taxpayers.
- To notify the CIR in writing, of his cessation of income, within 1 month of such cessation.
- To notify the CIR in writing, of his departure from HK for any period exceeding 1 month, not later than 1 month before the expected date of departure.
- To notify the CIR in writing, of his change of address, within 1 month of such change.
- keep business records for not less than 7 years
- keep rental records for not less than 7 years
s52(2): Employer's obligations
- To furnish an Employer's Return within the time limit as requested in the notice from an assessor in writing.
- To notify the CIR in writing, of the commencement of employment of an employee chargeable to tax, not later than 3 months after the date of commencement of employment.
- To notify the CIR in writing, of the cessation of employment of an employee chargeable to tax, not later than 1 month before the expected date of cessation of employment.
- To notify the CIR in writing, of the departure of an employee chargeable to tax from Hong Kong for more than 1 month, not later than 1 month before the expected date of departure AND To withhold payment of money to the employee for a period of 1 month from the date of serving a notice to the CIR under s.52(6).
objection - conditions for raising late objection
- absences from HK
- *but must be approved by commissioner
holdover of tax in dispute- unconditional and conditional
- unconditional:no cash outflow, but need to pay interest if TP loses
- (1)purchase a tax reserve certificate (IRD can redeem if IRD win)*
- (2) provide a banker's undertaking**
- *if TP wins, earns interest; if TP loses, no need to pay interest
- ** if TP loses, need to pay interest
s70A claim: conditions to re-open assessment - conditions
- excessive (tax overpaid) due to error or omission AND
- time limit: within 6 yeas after Y/A or within 6 months after the serve date of notice of assessment, whichever is later
*change of tax laws/practice/case: no corrections
made if the assessment is made according to prevailing practice at the time the return is made
when does assessment become final and conclusive?
within one month without objection
holdover of provisional tax - time limit
- 28 days before (-28) payment due date
- 14 days after (+14)the date of notice for payment,
- whichever is later
holdover of provisional tax - conditions
- assessable value, net chargeable income, assessable profit are likely to be less than 90% of the provisional amount
- cessation of income
- objection has been lodged against the final assessment
- profit tax: loss b/f is omitted/incorrect
- property and profits tax: election for personal assessment which will likely reduce tax liab
objection - how to raise?
- in writing
- state the grounds for objection
- received by commission one month AFTER the issue date of assessment (eg. 03/09/2016>03/10/2016)
- +: to object against EA: must file a completed return with supporting and a notice of objection
when will assessor issue estimated assessment (EA)?
- return is not accepted
- in the absence of a return
- accounts have not been kept in a satisfactory form (eg. sole pro)
s60: Assessment (or additional assessment)
- normal: within the Y/A
- additional: within 6 years (+6) after the Y/A or 10 years after Y/A for wilful tax evasion
s80(1): Penalty provisions
- not involving a tax undercharged
- Penalty: level 3
level 3 and level 5 penalty
- level 3: 5k to 10k
- level 5: 25k to 50k
s80(1A): Penalty provisions
- Any person who without reasonable excuse fails to comply with the requirements of s.51C (i.e. fails to keep records of business income and expenditure) for a period not less than 7 years) commits an offence.
- Penalty: a fine at level 6 and the Court may order the person convicted within a time specified in the order to perform the act which he has failed to do so.
s80(2), S82A and S82(1): Penalty provisions - scope, when and penalty
- common: involves tax undercharged
- s80(2) and s82A: without reasonable excuse
- s82(1): tax evasion
- s82A: administrative penalty (no prosecution)
- s80(2) and s82(1): prosecution
- s80(2): level 3 +max 300% of tax undercharged
- s82(1): either
- (i)summary conviction: level 3+max 300% of tax undercharged+max 6 months
- (ii)indictment: level 5+max 300% of tax undercharged+max 3 years
- s82A: max 300% of tax undercharged
tax in default
- max 5% surcharge
- default >6 months: max 10% surcharge on total amount due
advance ruling - purpose,when will be refused/decline and effect
- ascertain tax position of contemplated transaction
- when refuse/decline:
- not seriously contemplated
- too frivolous
- subject of tax audit
- subject of a return due to or has been lodged
- subject to an objection
- effect:binding on IRD unless the arrangement is materially different