XN000022-1987-08-27 — Page 2

THURSDAY, AUGUST 27, 1987

DOUBLE TAX RELIEF PROPOSED

THE GOVERNMENT PROPOSES TO AMEND THE INLAND TO PROVIDE RELIEF FROM DOUBLE TAXATION.

REVENUE

ORDINANCE

THE PROPOSAL, IF ACCEPTED BY THE LEGISLATIVE COUNCIL,

HONG KONG BASICALLY MEANS THAT A TAXPAYER WILL BE EXEMPT FROM PAYING

INCOME DERIVED FROM SERVICES SALARIES TAX ON THE PART OF

RENDERED

OUTSIDE THE TERRITORY.

FINANCIAL

SECRETARY,

PROPOSED AMENDING

TIME APPORTIONMENT,

THE IDEA WAS FIRST MOOTED BY THE MR PIERS JACOBS, IN HIS 1987 BUDGET SPEECH WHEN HE THE LAW TO PROVIDE FOR THE AUTOMATIC GRANTING OF WHERE IN A YEAR OF ASSESSMENT, AN EMPLOYEE RENDERED HONG KONG FOR A PERIOD OF MORE THAN 60 DAYS IN TOTAL.

SERVICES OUTSIDE

BILL. WHICH BUDGET, BECAUSE

HOWEVER, THIS WAS OMITTED FROM THE INLAND REVENUE GAVE LEGAL EFFECT TO OTHER TAX PROPOSALS MADE IN THE AN IMPORTANT HIGH COURT JUDGEMENT ON A SALARIES THE GOEPFERT CASE) CONCERNING TIME APPORTIONMENT WAS TIME.

TAX CASE (KNOWN A3 PENDING AT THE

·

10.

1987 RULED AGAINST JUDGEMENT IN THIS CASE ON APRIL COMMISSIONER OF INLAND REVENUE AND FOR THE TAXPAYER.

THE

LIGHT COULD

A GOVERNMENT SPOKESMAN SAID TODAY (THURSDAY) THAT IN THE OF THE HIGH COURT DECISION, THE COMMISSIONER CONSIDERED THAT HE

INLAND REVENUE ORDINANCE GIVE AN INTERPRETATION TO SECTION 8 OF THE

A TAXPAYER WOULD BE EXEMPT TO MEAN THAT, IN PRACTICALLY ALL CASES,

TAX ON THAT PART OF FROM LIABILITY TO PAY HONG KONG SALARIES INCOME DERIVED FROM SERVICES PERFORMED OUTSIDE HONG KONG WHERE

(A)

WAS

NEGOTIATED,

AND

THE CONTRACT OF EMPLOYMENT INTO, AND IS ENFORCEABLE OUTSIDE HONG KONG; AND

-

HIS

ENTERED

(B)

THE EMPLOYER IS RESIDENT OUTSIDE HONG KONG; AND

(C)

THE EMPLOYEE'S REMUNERATION IS PAID TO KONG.

HIM OUTSIDE HONG

THAT A TAXPAYER

WOULD BE EXEMPT FROM FOR LESS THAN 60 IN THE ABSENCE OF AN KONG SOURCE EMPLOYMENT

THE SPOKESMAN ADDED LIABILITY TO SALARIES TAX IF HE VISITED HONG KONG DAYS IN A YEAR OF ASSESSMENT. BUT OTHERWISE, AMENDMENT TO THE EXISTING LAW, A TAXPAYER WHO HAD A HONG

ON ALL. INCOME FROM HIS OF EMPLOYMENT WOULD BE TAXABLE WHETHER HE RENDERED HIS SERVICES IN OR OUTSIDE HONG KONG,

THE INLAND

1987, ΤΟ BILL

BE (NO.2) REVENUE (AMENDMENT}

PROPOSES ΤΟ AMEND SECTION GAZETTED ON SEPTEMBER 4,

8(1A) OF THE

ΤΟ EXCLUDE FROM INLAND REVENUE ORDINANCE

LIABILITY TO HONG KONG SERVICES RENDERED SALARIES TAX ANY INCOME THAT A PERSON DERIVES FROM

TAX SIMILAR OUTSIDE HONG KONG IF THE INCOME IS LIABLE TO A

RENDERED THE KONG SALARIES TAX IN THE TERRITORY

IN AND IF HE CAN ESTABLISH THAT HE INCOME.

WHERE HE HAS PAID TAX

RESPECT

TO HONG

SERVICES OF THAT

THE BILL