XN000022-1987-10-14 — Page 41

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WEDNESDAY, OCTOBER 14, 1987

CONTINUE BE DRAWN BETWEEN HONG KONG AND NON-HONG KONG EMPLOYMENTS, AS THOSE TERMS WERE PRESENTLY UNDERSTOOD, AND THAT WITHOUT THIS DISTINCTION THE AMBIT OF THE PROPOSAL MIGHT BE TOO BROAD, COULD BE EXPLOITED AND WOULD COST THE REVENUE SIGNIFICANTLY MORE THAN ANTICIPATED.

HE SAID IT BECAME CLEAR THAT A DISTINCTION SHOULD

HE SAID ANOTHER IMPORTANT FACTOR WAS THAT AFTER HR HAD A DELIVERED HIS BUDGET SPEECH, THE HIGH COURT HANDED DOWN JUDGMENT IN TAX CASE CONCERNING A CLAIM FOR TIME APPORTIONMENT. "THIS WAS THE NOW WELL-KNOWN GOEPFERT DECISION," HE ADDED.

"IN REACHING ITS DECISION, THE COURT GAVE VALUABLE GUIDANCE TO WHAT DETERMINED IN A PARTICULAR CASE WHETHER TIME APPORTIONMEN WOULD BE ALLOWED UNDER THE EXISTING LAW.

WAS

"SIGNIFICANTLY, AFTER REFERRING TO MATTERS WHICH WERE RELEVANT, THE COURT CONCLUDED THAT THE PLACE WHERE SERVICES WERE RENDERED NOT ONE TO BE CONSIDERED AND SHOULD BE IGNORED, HE SAID.

WITHDREW

IN THE LIGHT OF THESE DEVELOPMENTS, MR JACOBS SAID HE HIS ORIGINAL PROPOSAL FOR FURTHER CONSIDERATION AND CONSULTATION.

HE SAID ARISING OUT OF THE GOEPFERT DECISION, THE COMMISSIONER OF INLAND REVENUE HAD BEEN ABLE TO DRAW UP SIMPLE GUIDELINES IN THE PRACTICE NOTES FOR DETERMINING WHETHER TIME APPORTIONMENT SHOULD DE GRANTED.

'

THE COMMISSIONER

COULD NOW GIVE SECTION 8 OF THE INLAND REVENUE ORDINANCE AN INTERPRETATION WHICH WOULD MEAN

THAT, PRACTICALLY ALL CASES, A TAXPAYER WOULD BE EXEMPTED FROM LIABILITY

HIS PAY HONG KONG SALARIES TAX ON THAT PART OF

INCOME DERIVED FROM SERVICES PERFORMED OUTSIDE HONG KONG WHERE

IN

TO

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

THE EMPLOYER IS RESIDENT OUTSIDE HONG KONG; AND

THE EMPLOYEE'S REMUNERATION IS PAID ΤΟ HIM OUTSIDE HONG KONG.

FOLLOWING THE JUDGEMENT AND THE INTERPRETATION NOW PLACED UPON SECTION 8 BY THE COMMISSIONER, MR JACOBS SAID SALARIES TAXPAYERS WOULD BE DIVIDED INTO TWO DISTINCT CATEGORIES.

"FIRST, TAXPAYERS WHO HAVE A HONG KONG SOURCE OF EMPLOYMENT,

EMPLOYMENT

AND WHO ARE TAXABLE ON ALL INCOME FROM THAT

甲甲

RENDER SERVICES IN OR OUTSIDE HONG KONG, HE SAID.

WHETHER THEY

"SECOND, TAXPAYERS WHO HAVE A SOURCE HONG KONG AND WHO ARE ONLY TAXABLE ON INCOME RENDERED IN HONG KONG."

OF EMPLOYMENT OUTSIDE DERIVED FROM SERVICES

MR JACOBS