Question 1 (35 marks) Mr. Smith is tax resident in Mainland China, and holds the position of Chief Operation Officer at Silver Star Corporation (SSC). The place of incorporation and business of SSC are both in Mainland China. According to his employment contract, Mr. Smith will be responsible for overseeing the operations of SSC and its subsidiaries in various countries and jurisdictions across Asia. Due to his job duties, he has no place of work and is required to travel to the various locations in which SSC's subsidiaries are situated. His wife and son live in Mainland China. Mr Smith's salary costs are shared between SSC and its subsidiaries, including the Hong Kong subsidiary, Gold Star Corporation (GSC), under a cost sharing arrangement. However, Mr. Smith is paid by SSC in his bank account in Beijing. Mr Smith has approached you for advice concerning HK tax implication on his employment, and has provided his number of days spent within and outside Hong Kong between 1 April 2022 and 31 March 2023 as follows: Number of days worked in HK 58 days Number of days stayed in HK without any assignment from SSC 30 days Number of days outside HK 277 days Note It is assumed no annual leave entitled to and taken by Mr. Smith. Required: a) With reference to the Goepfert case, analyze and comment Mr. Smith's locality of employment with SSC. (8 marks) b) Advise Mr Smith on his Hong Kong salaries tax position in relation to his employment with SSC for the year of assessment 2022/2023, with reference to the relevant section(s) of Inland Revenue Ordinance and relevant Article(s) of Comprehensive Double Taxation Arrangement between Hong Kong and Mainland China. Note: Ignore relief from double taxation may apply to Mr. Smith (27 marks)

Question 1 (35 marks) Mr. Smith is tax resident in Mainland China, and holds the position of Chief Operation Officer at Silver Star Corporation (SSC). The place of incorporation and business of SSC are both in Mainland China. According to his employment contract, Mr. Smith will be responsible for overseeing the operations of SSC and its subsidiaries in various countries and jurisdictions across Asia. Due to his job duties, he has no place of work and is required to travel to the various locations in which SSC's subsidiaries are situated. His wife and son live in Mainland China. Mr Smith's salary costs are shared between SSC and its subsidiaries, including the Hong Kong subsidiary, Gold Star Corporation (GSC), under a cost sharing arrangement. However, Mr. Smith is paid by SSC in his bank account in Beijing Mr Smith has approached you for advice concerning HK tax implication on his employment, and has provided his number of days spent within and outside Hong Kong between 1 April 2022 and 31 March 2023 as follows: Number of days worked in HK 58 days Number of days stayed in HK without any assignment from SSC 30 days Number of days outside HK Note 277 days It is assumed no annual leave entitled to and taken by Mr. Smith. Required: a) With reference to the Goepfert case, analyze and comment Mr. Smith's locality of employment with SSC. (8 marks) b) Advise Mr Smith on his Hong Kong salaries tax position in relation to his employment with SSC for the year of assessment 2022/2023, with reference to the relevant section(s) of Inland Revenue Ordinance and relevant Article(s) of Comprehensive Double Taxation Arrangement between Hong Kong and Mainland China. Note: Ignore relief from double taxation may apply to Mr. Smith (27 marks)