Part A Multiple Choice (2 marks each, total 20 marks)

Question 1

K Ltd owns three properties, X, Y and Z. Property X is located in Hong Kong and is let out at a monthly rental of $10,000. Property Y is also located in Hong Kong and is currently occupied by a shareholder of K Ltd, rent-free. Property Z is located in London and is let out at a monthly rental of $16,000. Assume the rental period covers 12-month period in the year of assessment 2021/22.

 What is the property tax payable by K Ltd for the year of assessment 2021/22? A $14,400

B $18,000 C $36,000 D $59,040

Question 2

Mr. Leong did not pay profits tax of $250,000 which as specified in the notice of profits tax assessment was due on 18 January 2021. On 30 January 2021, the Commissioner imposed a surcharge of $12,500 on the outstanding tax. Mr. Leong paid $60,000 to the Commissioner on 15 February 2021 but has been unable to pay any sum thereafter.

 What is the amount of further surcharge (maximum) which can be imposed by the Commissioner after 18 July 2021?

A $9,500 B $10,125 C $20,250 D $26,250

Question 3

The tax system in Hong Kong plays an important role in attracting foreign investment.

 Which of the following are the attractions of Hong Kong’s tax system to foreign investors?

(1) Simple tax structure

(2) Low tax rates

(3) No capital gains tax

(4) No tax on dividends

(5) Provisional tax

A 1 and 2 only

B 2, 3 and 4 only

C 1, 2, 3 and 4

D 1, 3, 4 and 5

Question 4

Mr. Man started a trading business on 1 April 2021 and closed his first set of accounts on 31 March 2022. He has assessable profits in his first 12 months of operation but has not received a tax return from the Inland Revenue Department.

 What is the latest date by which Mr. Man is required to notify the Inland Revenue Department that he is chargeable to tax and for which year of assessment?

Question 5

Mr. Bean, employed by a UK company and worked in the UK. His job duty is required to travel to HK to visit customers. He arrived in Hong Kong on 1 January 2022 and left Hong Kong on 2 March 2022. Mr. Bean has purchased a property in Hong Kong in February 2022. What is his exposure of Salaries Tax in Hong Kong in the year of assessment 2021/2022?

A. Salaries are fully assessable because Mr. Bean has a property in Hong Kong

B. Salaries tax will be charged on pro-rata basis per the number of days worked in HK.

C. Salaries tax will be charged on pro-rata basis per the number of days stayed in HK

D. Exempt from salaries tax in Hong Kong

Question 8

Mr. Bean, has been classified as a Hong Kong director by the IRD. His job duty is required to travel to overseas to visit customers. During the Y/A 2021/2022, he left Hong Kong on 8 April 2021, and return Hong Kong on 3 March 2022. He received director fee of $300,000. What is his exposure of Salaries Tax in Hong Kong?

A. All the director fee is 100% assessable

B. Exempted because Mr. Bean stayed in Hong Kong less than 60 days in the Y/A 2021/2022

C. Salaries tax will be charged on pro-rata basis per the number of days stayed in HK

D. Director fee is not subject to any salaries tax because Mr. Bean is not an employee

Question 9

In determining whether a person is liable to tax, which of the following statement is correct?

A. A corporation can claim personal assessment to reduce the tax

B. Rental income of an individual can be charged on profits tax

C. A corporation can claim exemption from salaries tax

D. Rental income of a corporation can be charged on profit tax

Question 10

Mr. Chen did not pay profits tax of $200,000 which as specified in the notice of profits tax assessment was due on 1 January 2021. On 30 June 2021, the Commission imposed a maximum surcharge of $10,000 on the outstanding tax. What is the amount of further maximum surcharge which can be imposed by Commissioner from 1 July 2021 to 30 June 2022?

A $21,000 B $31,000 C $231,000 D $20,000

Question 11

What is Mr. Zheng’s holiday journey benefits chargeable to salaries tax for the year of assessment 2021/22 as mentioned in note (5)?

Question 12

What is Mr. Zheng’s share option gain for the year of assessment 2021/22 as mentioned in note (6).

Question 13

What is Mr. Zheng taxable gain on the disposal of shares on 31 March 2022?

Question 14

What is the Rental Value in respect of the flat provided by AD Ltd. to Mr. Zheng for the year of assessment 2021/22?

Question 15

What is the Rental Suffered in respect of the flat provided by AD Ltd. to Mr. Zheng for the year of assessment 2021/22?

(1) Period of lease:

(2) Rent free period:

(3) Monthly rent:

(4) Premium:

(5) Rates & government rent:

1 April 2020 to 31 March 2022 (24 months)

1 April 2020 to 30 April 2020 (1 month)

$22,000

$100,000 payable on 1 April 2020 Payable by the landlord