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To address this concern, we have agreed with the Bills Committee to add a new clause to amend section 80 of the Ordinance. Under this new provision, the employer may rely on the individual (i.e. the "employee") to provide a statement in writing in a form specified by the Commissioner of Inland Revenue to the effect that the agreement in question does not render the individual chargeable to salaries tax. The employer will have a defence in any proceedings against him for failure to report if he shows that he did not comply with the reporting requirements because he relied upon the statement in writing by the relevant individual and that it was reasonable for him to rely upon that statement in the circumstances. This would help the employer to discharge his responsibility. Together with the advance ruling system to which I referred in my speech on the resumption of the Second Reading, we are confident that employers should have no difficulties in ascertaining and discharging their responsibilities.
In respect of the "employee" or the relevant individual, the Commissioner will specify a standard form so that the individual knows exactly what information he has to provide in the written statement. The Commissioner will design the form in such a way that the relevant individual only needs to report factual information. There is no need for him to provide information of a judgemental nature. However, if he knowingly or recklessly makes a statement which is materially false or misleading, he will be guilty of an offence which carries a maximum fine at Level 3, or $10,000.
The Commissioner will issue a Practice Note to set out the details of the
arrangements.
Mr President, I beg to move.
End/Wednesday, July 5, 1995
Professional Accountants (Amendment) Bill
Following is the speech by the Secretary for Financial Services, Mr Michael Cartland, in moving the second reading of the Professional Accountants (Amendment) Bill 1995 in the Legislative Council today (Wednesday):
Mr President,
I move the second reading of the Professional Accountants (Amendment) Bill 1995.