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WEDNESDAY, JULY 18, 1990
BILL TO CLARIFY TAXATION OF FRINGE BENEFITS * * * * * *
A BILL WHICH SEEKS TO AMEND THE GOVERNMENT IS INTRODUCING
PRACTICE IN THE INLAND REVENUE ORDINANCE TO REFLECT THE GOVERNMENT'S RESPECT OF THE TAXATION OF FRINGE BENEFITS.
(AMENDMENT) (NO.
COUNCIL LATER
3)
BILL THIS
1990, YEAR, WILL
TO BE BE
REVENUE THE INLAND INTRODUCED INTO THE LEGISLATIVE GAZETTED ON FRIDAY (JULY 20).
THE BILL, A GOVERNMENT SPOKESMAN GOVERNMENT'S PRESENT POSITION ON
EXPLAINING THE PURPOSE OF SAID THAT IT AIMED TO CLARIFY THE TAXATION OF FRINGE BENEFITS FOLLOWING THE DECISION ON THE DAVID HARDY GLYNN V. THE COMMISSIONER OF INLAND REVENUE APPEAL IN DECEMBER 1988.
BY CASE,
THE
COURT
OF
CONSIDERS BROADEN THE
"THE BILL HAS BEEN INTRODUCED BECAUSE THE GOVERNMENT THAT IT WOULD BE INAPPROPRIATE AT THIS POINT IN TIME TO EXTENT TO WHICH FRINGE BENEFITS ARE TAXED," THE SPOKESMAN SAID.
IN BROAD TERMS, THE GLYNN CASE WAS CONCERNED WITH THE OF WHETHER SCHOOL FEES PAID BY MR GLYNN'S EMPLOYER IN RESPECT DAUGHTER'S EDUCATION, ESCAPED CHARGEABILITY TO SALARIES TAX BY OF THE ARRANGEMENTS USED TO MAKE THE PAYMENTS.
RULED THAT THE WORD "PERQUISITE"
QUESTION OF HIS VIRTUE
APPEAL IN THAT CASE A DECISION HANDED DOWN BY THE COURT OF
IN THE INLAND REVENUR ORDINANCE ALL BENEFITS DERIVED SHOULD BE GIVEN ITS ORDINARY MEANING AND HENCE BY AN EMPLOYEE FROM HIS EMPLOYMENT WERE CHARGEABLE TO SALARIES TAX.
THE SPOKESMAN SAID, ADDING "THIS CREATED SOME UNCERTAINTY,"
WAS THAT PRACTICE DEPARTMENT'S THE THAT PRIOR TO THE DECISION,
BY FORM OTHER
UNLESS COVERED THAN MONEY, BENEFITS RECEIVED IN A
DID NOT SPECIFIC PROVISIONS OF THE ORDINANCE, WERE NOT TAXED IF THEY TAKE THE FORM OF "MONEY'S WORTH".
A BENEFIT IS REGARDED AS CONSTITUTING "MONEY'S WORTH" IF IT
IT IS CAPABLE OF BEING CONVERTED INTO MONEY BY THE RECIPIENT OR DISCHARGE BY THE EMPLOYER OF A LIABILITY OF THE EMPLOYEE.
IS
THE
PRACTICE
OF INLAND IN A STATEMENT MADE IN MARCH 1989, THE COMMISSIONER
ACCORD LEGISLATION
BE INTRODUCED TO REVENUE ANNOUNCED THAT
THE TAXATION OF FRINGE WITH
PRE-GLYNN THE BENEFITS.
WOULD CONCERNING
PRACTICE WOULD BE PRIOR TO THE
RAISED
AT THAT TIME HE HAS MADE IT CLEAR THAT THE
1989-90 ASSESSMENTS FOLLOWED FOR 1988-89 AND INTRODUCTION OF LEGISLATION.
COUNCIL. THE
BENEFITS ON A
COURT OF APPEAL, ALTHOUGH
IN THE MEANTIME, THE CASE PROCEEDED TO THE PRIVY PRIVY COUNCIL'S RULING, LIKE THAT OF THE NOT TO THE SAME EXTENT, ALLOWS THE TAXATION OF FRINGE WIDER SCALE THAN THE DEPARTMENT'S PRACTICE.
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