Question 1 (15 marks) Mr Pang is a director and shareholder of two Hong Kong companies, AA Company and BB Company. BB Company is a wholly owned subsidiary of AA Company. During the year ended 31 March 2014. you have been supplied with the following information in respect of Mr Pang AA Company (5) BB Company (5) (1) Salaries 600,000 120,000 (2) Bonus 75,000 10,000 (3) Dividend 150,000 100,000 (4) Mr Pang rented a flat for his residence at a monthly rent of $30,000. BB Company refunded $28,000 to him. (5) On 15 August 2013, Mr Pang received a notice of salaries tax assessment from the Inland Revenue Department with salaries tax of $88,000 and $13,000 due on 3 January 2014 and 3 April 2014 respectively. AA Company paid the tax for Mr Pang on the due dates. (6) Mr Pang carned again on share options of $375,000. (7) Mr Pang paid the following expenses: Allowable outgoings and expenses: $8,000 Salary to domestic helper $36,000 RFOUIRED: (a) Compute Mr Pang's salaries tax liability for the year of assessment 2013/2014. Ignore provisional salaries tax and tax rebates or reduction, if any. (10 marks) (b) What are the salaries tax implications on rent refund and housing allowance? (5 marks) year of assessment standard rate salaries tax, property tax and personal assessment) 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 15% 15% 15% 15% 15% 15% 2% 2% 2% 2% Progressive Rates upon the first $40,000 upon the first $45,000 upon the first $50,000 29 2% 7% 7% 7% 7% upon the next $40,000 upon the next $45,000 upon the next $50,000 6% 12% 12% 12% 12% upon the next $40,000 upon the next $45,000 upon the next $50,000 12% 10% upon the next $50,000 14% upon the remainder 17% 17% 17% 17% 17% 17%