Jack Chan is a sales director of Twins Trading Limited, a company incorporated in Hong Kong. Jack received net basic salary (after deduction of rent) of $42,500 per month and a commission of $264,000 for the year of assessment 2015/16. He contributed 5% of his total salary and commission to MPF. The following are other facts related to Jack during the year of assessment 2015/16:

1. It is a practice that Jack will pay for the taxi fares for the customers to accompany them to travel to the company’s factories. During the year, Jack incurred a total of $8,000 of such taxi fares for this purpose. The expenses were not reimbursed by the company but Jack received a taxi allowance of $5,000 during the year.
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3. Jack’s private credit card statements showed several items which were not reimbursed by the company:
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5. $32,000 paid to a Recreational Club in Kowloon for the club’s annual membership fee. Jack joined this club in order to foster new customers. During the year, 50% of his commission related to new customers that he met in the club.
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7. a total amount of dining expenses of $48,000 for the year represented Jack’s private dining.
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9. $2,400 paid for home telephone bill for the year. He estimated that 15% of this total bill is business related because occasionally Jack gave directions to his sub-ordinates on holiday using his home telephone.
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11. $3,000 paid to a professional association for annual subscription (Institute of Marketing and Sales)
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13. $130,000 as annual tuition fee for studying part-time MBA programme in a university in Hong Kong.
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15. $4,700 monthly donation to an approved Hong Kong charity

3. During the year, Jack traveled to Canada to visit his mother who lives there and his only child, Sam (aged 20), who studies at a university full time in Canada. He incurred the following expenses for the trip: air ticket ($14,500), car hire ($7,250), food and accommodation ($6,120). Jack remitted $260,000 annually for Sam’s tuition fee to the university. The company reimbursed 10% of Sam’s tuition fee to Jack as staff benefit.
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5. Wilson, a devoted long-term customer of Twins Trading Limited, won big money in the stock market in 2015 April. He gave Jack a diamond watch (value at open market: $80,000) as a token of appreciation for Jack’s service for Wilson’s purchase over the past few years in Twin’s Trading Limited. Also, Jack was invited to the annual dinner of Wilson’s company and Jack won a cash prize of $10,000 in the lucky draw of the dinner.
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7. Jack paid $25,400 per month to an elderly residential caring home in Hong Kong for his mother (aged 68) who lives there.
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9. Jack lives with his wife and her father (aged 70) in a flat in Kowloon which is provided by the subsidiary company of Twins Trading Limited. Twins Trading Limited deducts $2,500 of Jack’s basic salary per month as rent. Since Jack’s father-in-law is a disabled person, Jack incurred $4,250 per month to employ a domestic helper to take care of him.

Required:

(a)     Prepare a salaries tax computation for Jack to calculate the salaries tax liability for the year of assessment 2015/16.

(b)    Provide explanations for the taxation treatments that you have given to items 2i, 2iii and 4.