中港两地税制安排.DOC

Case No. D39/10 Salaries tax – source of income – double taxation – sections 8(1)(a), 8(1A)(b), 8(1B), 49(1), 50 and 68(4) of Inland Revenue Ordinance (‘IRO’); section 3 of Apportionment Ordinance. [Decision in Chinese] Panel: Albert T da Rosa, Jr (chairman), Fan Cheuk Hung and Erik Shum. Date of hearing: 12 November 2010. Date of decision: 21 January 2011. The Appellant objected to the salaries tax assessment raised on him for the years of assessment 2006/07 and 2007/08 by the Inland Revenue Department. The Appellant claimed that during those two years of assessment, he had been employed and worked in the Mainland, and therefore his income during the said period should not be taxable. However, according to the Appellant’s employment document, the Appellant was actually appointed as the Chief Financial Controller by Company C-Hong Kong, and was seconded to its subsidiary in Guangzhou, Company C-China. But the Appellant took issue with the employment document. The Appellant also claimed that his salaries were paid into his mainland bank account, and Company C-China, as the tax withholding agent, withheld and remitted his income tax according to mainland regulations. Moreover, the Appellant enjoyed national holidays in the Mainland. Held: The Appellant’s employment document clearly stated that he was appointed as the Chief Financial Controller of Company C-Hong Kong; his work duties were subject to agreement between Company C-Hong Kong and him; Company C-Hong Kong was entitled to terminate his employment. According to the employment document, the employer of the Appellant was Company C-Hong Kong. The Appellant’s employer Company C-Hong Kong was incorporated in 2002 in Hong Kong and operated its business in Hong Kong. After the Appellant had signed on the employment document, he had to send back the contract to Company C-Hong Kong before it became a binding agreement. Therefore, the Appellant’s employment contract was executed in Hong Kong. The employment