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Suspended jail sentence for property owner over tax evasion

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A property owner convicted in the District Court of evading property tax was today (September 3) sentenced to four months' imprisonment, suspended for two years. He was also fined $1,051,062, representing about 270% of the tax evaded.

A spokesman for the Inland Revenue Department today reminded taxpayers that tax evasion was a criminal offence under the Inland Revenue Ordinance.

The maximum penalty for each charge is three years' imprisonment and a fine of $50,000 plus a further fine of three times the amount of tax evaded.

The court was told that the defendant, aged 46, was the sole owner of a shop in Kowloon. He subdivided the property into two shops, which were referred to as Shop A and Shop B in the respective tenancy agreements. The defendant let the two shops to two different tenants and received monthly rental through his bank accounts.

An investigation by the Inland Revenue Department revealed that the defendant reported only the rental income derived from Shop A in his tax returns, and omitted the rental income derived from Shop B for the years of assessment 2000-01 to 2004-05. The total amount of rental income understated was $2,852,500 and the resultant tax evaded was $390,425.

The defendant pleaded guilty to five counts of omitting rental income from tax returns for the years of assessment, contrary to section 82(1)(a) of the Inland Revenue Ordinance and five counts of signing tax returns for the relevant years of assessment without reasonable grounds for believing the same to be true, contrary to section 82(1)(d) of the ordinance.

Ends/Monday, September 3, 2007

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