XN000022-1995-06-28 — Page 48

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Answer:

Mr President,

The answers to the questions are as follows -

(a) (i)

(b)

(ii)

Under the Inland Revenue Ordinance, the official emoluments of consuls, vice-consuls and persons employed on the staff of any consulate, who are subjects or citizens of the state which they represent, are exempt from salaries tax. To conform with international practice, this exemption is extended to officials of another jurisdiction who serve with a department or agency of that jurisdiction, provided that the department or agency is not an undertaking carried on for profit. Accordingly, Chinese officials who are posted to Hong Kong to serve with a department or agency of the Chinese Government that is not an undertaking carried on for profit are exempt from salaries tax in Hong Kong.

Any person employed by Chinese enterprises and service institutions carrying on business in Hong Kong for profit are liable to salaries tax on income arising in or derived from Hong Kong from an office or employment of profit. We do not draw any distinction between persons posted to Hong Kong and persons engaged locally.

(iii) Chinese officials posted to the Hong Kong Branch of Xinhua News Agency are exempt from salaries tax in Hong Kong by virtue of a(i) above. However, locally engaged personnel are liable to Hong Kong salaries tax.

As a general point, I would like to remind Members that under the secrecy provision of the Inland Revenue Ordinance, we are not at liberty to disclose details of the tax liability of individual taxpayers.

Turning to the specific question, we do not keep detailed statistics on the number of people in the categories referred to in the Member's question and their tax liabilities.

End/Wednesday, June 28, 1995