Lancy had been employed by IBM Ltd (IBM), a US company which carries on business in Hong Kong. Due to Lancy’s father being very ill, she needed to fly to Canada in the following week to take care of him. On 30 November 2019, Lancy submitted her resignation to IBM and terminated her employment with immediate effect by foregoing one-month’s salary in lieu of notice.
As it was possible Lancy might need to stay in Canada for a few months, she requested that IBM remit any outstanding payment owed to her (including her leave pay and payment from IBM’s provident fund, and after deducting the one-month’s salary in lieu of notice) to her bank account in Canada.
Required:
You are financial planner of the CEO of IBM. You are required to advice IBM the potential obligations on tax in respect of Lancy’s resignation.