Detailed Case Summary: D1/17 Board of Review Decision on Salaries Tax

This case study provides a comprehensive summary of the Board of Review case D1/17, focusing on salaries tax. The case involves an appellant contesting the assessment of their income for the tax years 2005/06 and 2006/07. The appellant claimed that income derived from work undertaken in Country A was not generated in or derived from Hong Kong and, therefore, should not be subject to salaries tax. The Board examined the facts, including the employment and consultancy agreements between the appellant, Company C, and Company E. The key issues addressed were whether the appellant was an employee of Company C and whether the income from Country A was considered income generated from Hong Kong. The Board concluded that an employment contract existed and that the income was indeed derived from Hong Kong, upholding the original assessments. The summary details the facts, grounds of appeal, issues, and the final decision, providing a clear understanding of the case's complexities and outcomes.

Board Of Review Case
Summary
Case No. D1/17

 Facts
 Grounds of appeal
 Issue
 Decision
Table of Contents

 Appellant stated that, he was not in the
employment relationship with Company C
and the profit derived from the work
undertaken in Country A of HK$ 495000,
between the period of 10/08/06 to 30/11/06
is not profit generating in or originated from
Hong Kong.
Facts

 At the hearing, the Board asked from the
Appellant to consider the paragraph (2) to
(14) of the ascertainment to identify any
matter which is disputed or agreed by him.
After this, the Appellant get agreed with the
matters stated in those paragraphs, and on
this basis, Board carried out their
proceedings.
Continued

 Company C1 was established in Country D
and registered as an overseas company and
set up a place of business in Hong Kong as
per the Part XI.
 In the country A, company E1 was registered.
 In this case, the Appellant was professional
and is the member of Institution G. He was
eligible in Country D, but in several countries
he had worked, including Country A, Region
H, and Region J.
Facts

 In the year 1990, The Appellant became the
citizen of Country A. In the year 2005,
August he was the permanent residence of
Hong Kong. On the basis of records from the
immigration department it has been found
that, he has been regularly engaged in the
work under the several employments from
1998. Now the Appellant is living in Country
A.
Facts

 During the year 2005 and 2006, in the
Country A as well as in Hong Kong, several
properties are owed by the Appellant.
Further, he along with his wife lived in the
Hong Kong, and the children were living in
Country D. further, one bank account is also
held by the applicant in the Hong Kong.
Facts

 There were four agreements held by the
appellant with Company C and Company E,
one employment agreement and three
consultancy agreements, like 2005
agreement, 2006 agreement, and 2007
agreement.
 There are some issues in the 2006 agreement
as to where and when the agreement was
negotiated. It was accepted by the court that
2006 agreement were negotiated outside
Hong Kong.
Facts

 One of the points in the 2006 agreement is
related with Indemnities. This clause stated
that, consultant will be responsible for any
suit, claim, cost, or damages arise due to
any willful act or negligent act or omission
by him. Therefore, he should indemnify
Company E for any loss or injury occurring
at any time or after the time of agreement.
Facts

 Further, the norms of the three consultancy
agreement were mandatorily the same and
they are also stated in the agreement of 2005
and 2007. However, the clause related with
the Indemnity is not stated in 2005 and 2007
agreement.
 Agreement of 2006 stated that, Laws and
regulation in State N in County A, on the other
hand, the 2005 and 2007 Agreements were
regulated by the law applicable in Hong Kong.
Facts

 During the month of February to November 2006,
the Appellant had worked on 4 distinct projects.
In this, Project P and Q were based on the Hong
Kong Country; Project R was based on Country T,
and project B was based on Country A.
 However, the agreement of 2006, was objectively
made between Appellant and company E, the
Appellant issued his entire invoice to Company C,
not Company E. all salary and remuneration of
the applicant was pain in the bank account of
Hong Kong and in the Hong Kong Dollar.
Facts

 In the 2006 agreement, it was stated that
appellant will be pay in Australian Dollar at
A$875 per half day, the appellant was paid
in Hong Kong dollar at the rate of $ 5000 for
every half day and $ 10000 for every full
day.
 From the project B, Appellant received a
sum of HK $ 495000 during the period of
Apr 2006 to March 2007.
Facts