THE UNIVERSITY OF HONG KONG

FACULTY OF BUSINESS AND ECONOMICS

ACCT3107 – Hong Kong Taxation

Tutorial Questions
Unit 1 – Hong Kong Tax System and Administration

Question 1

The HKSAR Government is considering that the tax base in Hong Kong is too narrow. If
you are asked to design a new tax system for Hong Kong, what are the main factors and the
legal aspects that you will consider in designing a new tax system? Discuss.

Question 2

Mr. Wong signed an employment contract with a local trading company on 1 March 2018 as
a general manager at a monthly salary of $80,000. As part of his duties, Mr. Wong was
required to travel to Shenzhen twice a year and spent at least one month per trip to oversee
the China trade operation there. On 31 January 2019, Mr. Wong notified the company of his
resignation and his last working day would be 28 February 2019. The reason for his
resignation was that he had to migrate to Canada on 15 April 2019.

You are required to explain the compliance obligations of Mr. Wong and the employer
company under the Inland Revenue Ordinance.

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Question 3

Miss Wong has just noticed from the 2018/19 notice of assessment that the travelling
expenses so claimed by her in the tax return were disallowed and dependent parent allowance
in respect of her mother was not granted. The notice of assessment was issued and received
by her three months ago. Unfortunately, she was too busy at that moment to examine the
notice in details until now.

The travelling expenses were in fact taxi fares from her home to office which cannot be
reached by any public transport. She had made the claim for deduction in her 2018/19 tax
return together with the facts and grounds. The assessor disallowed the expenses with his
note stated in the notice of assessment that travelling expenses from home to office are not
deductible.

She then discovered that in the tax return filed, she forgot to put in the particulars of her
mother who is 64 years old and living together with her throughout the year.

Miss Wong asked you for advice on whether she could object to the assessment now in order
to claim for the deduction of travelling expenses as well as the dependent parent allowance.

Required:

(a) Explain to Miss Wong whether or not she could object to her 2018/19 tax assessment.

(b) Advise her any alternative course of action that can be taken.

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