TNAG-1609-FCO40-22131-Minutes-and-Hansards-of-the-Legislative-Council-of-Hong-Kong-1987 — Page 58

DRAFT SPEECH BY HON PETER POON, MBE, JP

LEGISLATIVE COUNCIL

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25.11.87

Inland Revenue (Amendment) (No.2) Bill 1987

MR. PETER FOON:

Sir,

Bill.

I rise to support the Inland Revenue (No. 2)(Amendment

For a considerable period of time there have been complaints that Hong Kong employees working elsewhere, in particular in China, had to bear double taxation on their salaries or emoluments. Government was asked to amend our tax

legislation to eliminate this burden. In his 1987/88 Budget lc. Speech, the Financial Secretary stated that he would be

c.

considering the time apportionment method. In his speech on 14 October 1987 in moving the Second Reading of the present Bill, he explained his reasons for changing his approach: he considers the new approach a better way to grant relief without involving undue loss of revenue to Hong Kong which may arise under the original arbitrary 60 days rule, and in view of the

of definitive views of the law on 'time apportionment' given in the High Court judgement in the 'Goepfert' case, decided since his 1987/88 Budget speech.

on

As the law now stands after the said case, employees under contracts entered into overseas will only be taxed on income for services rendered in Hong Kong. However, Hong Kong employees will still enjoy no automatic 'time apportionment' relief on employment income earned outside Hong Kong.

The present Bill will exempt liability to Hong Kong salaries tax for such employees on income arising from services rendered outside Hong Kong if it can be established that tax has been paid there in respect of such income. This is evidently fair as it takes away the element of double tax imposed by Hong Kong.

(I)

Tro.