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Press Release
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Property owner jailed for tax evasion
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A property owner was convicted
of tax evasion charges at the Eastern Magistrates' Court today (March
30). He was sentenced to two months' immediate imprisonment and
fined a total of $180,000, representing 138% of the tax evaded.
The defendant lodged an appeal against the sentence immediately
and was granted bail.
The defendant, Mr Yick Ka-lei, 39, pleaded guilty
to three charges of wilfully intending to evade property tax by
omitting rental income which should have been included in the Tax
Returns for the three years of assessment 1997/98 to 1999/2000,
contrary to Section 82(1)(a) of the Inland Revenue Ordinance (IRO).
He also pleaded guilty to one charge of wilfully with intent to
evade tax by making a false statement regarding the loss arising
from the sale of a property in connection with a claim for deduction
under the IRO for the year of assessment 2000/2001, contrary to
Section 82(1)(c) of the IRO.
The defendant acquired a property at Chico Terrace,
Mid-Levels in 1997 and sold it in 2000 at a loss of about $1.1 million.
The defendant lodged a claim to the Inland Revenue Department that
the property was acquired for trading purposes and as such, the
loss arising from the sale of the property should be brought into
the computation of his Personal Assessment. He falsely stated that
the property was left vacant throughout the three years he owned
it so as to let potential purchasers view it. In tax returns signed
by the defendant, he either declared that the property was for his
own use or left the relevant sections blank. An investigation by
the department revealed that the property was let during Mr Yick's
period of ownership. The omission of rental income in the defendant's
tax returns was also revealed.
The court heard that if the department had accepted
the statement that the property was left vacant, it would have been
a factor in misleading the department to conclude that the loss
was a trading loss arising from the sale. Had the defendant succeeded
in his claim, the total aggregate income of his and his spouse's
for the year of assessment 2000/2001 would have been completely
offset by the loss incurred. The resultant total tax that would
have been undercharged was $109,140. The total rental income omitted
was $386,483 for the three years of assessment and the resultant
total tax evaded was $20,949. The overall tax evaded was $130,089.
A department spokesman reminded people that tax evasion
was a criminal offence under the IRO. On conviction, the maximum
sentence is three years' imprisonment and a fine of $50,000 on each
charge, plus a further fine equivalent to three times the amount
of tax evaded.
Ends/Thursday, March 30, 2006
Issued at HKT 17:13
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