PRESS RELEASE

(Source : Information Services Department)

Property investment company fined for failure to notify chargeability to tax

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     A property investment company was convicted today (March 19) at the Eastern Magistrates' Courts for failing, without reasonable excuse, to inform the Commissioner of Inland Revenue (CIR) of its chargeability to profits tax for the years of assessment 2006-07, 2007-08, 2008-09 and 2010-11, contrary to sections 51(2) and 80(2)(e) of the Inland Revenue Ordinance (IRO) (Cap. 112). The defendant pleaded guilty to the four charges and was fined $16,000 ($4,000 for each charge) and a further fine of $8,300,000, equivalent to 98 per cent of the tax involved.

    The court heard that during the material times, the defendant owned a block of commercial building in Causeway Bay and derived rental income during the years of assessment 2006-07, 2007-08, 2008-09 and 2010-11. The defendant's accounts were made up to March 31 annually. Pursuant to section 51(2) of the IRO, the defendant should inform the CIR of its chargeability to tax in writing not later than four months after the end of the basis period for each of the said years of assessment, but it had failed to do so. The total amount of assessable profits for the four years was $50,240,067 and the total tax involved was $8,494,358.

    A spokesman for the Inland Revenue Department reminded the public that every person chargeable to tax for any year of assessment must inform the CIR in writing that he is so chargeable not later than four months after the end of the basis period for that year of assessment, unless he has already been required to furnish a tax return. A person who fails to notify chargeability without reasonable excuse shall be guilty of an offence and the maximum penalty for each charge is a fine of $10,000 and a further fine of three times the amount of tax undercharged.

Ends/Wednesday, March 19, 2014
Issued at HKT 15:11

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