VOLTE 47 18:58 10. Exercise a... Required: Assuming that Mr Wong is chargeable under s.8(1) of the Inland Revenue Ordinance, compute the Hong Kong salaries tax payable by Mr Wong for the year of assessment 2019/20. 6 Exercise 3.4 Mr So is a HK resident has been employed as an internal auditor by Goodway Lid, a company incorporated and carrying on business in HK. During the year ended 31 March 2020, Mr So has the following income and expenditure: 1. A monthly salary of $50,000 per month. 2. A bonus of $20,000 which was approved during a Board of Directors' meeting held on 15 March 2020, was received on 15 April 2020. 3. A meal allowance of $20,000 of which only $18,000 was actually expended. 4. During the year, Mr and Mrs So went on vacation trip to Thailand. Mr So received a holiday passage from Goodway Ltd in the sum of $10,000. 5. A reimbursement of medical expenses in the sum of $35,000 from Blue Cross Medicare Scheme. Goodway Ltd paid an annual premium of $5,000 for each member of staff. 6. A company-owned car (worth $380,000) was provided to Mr So for his own use. In addition, Mr So was reimbursed $500 per month to cover his petrol cost. 7. During the period from 1 April 2019 to 30 September 2019, Mr and Mrs So lived in a leased flat at a monthly rental of $30,000, out of which $25,000 was reimbursed by Goodway Ltd. With effect from 1 October 2019, Mr and Mrs So moved into a newly acquired property in Wanchai. The property cost was $6 million amd was financed by a low interest mortgage loan offered by Goodway Ltd. The commercial rate at that time was 3% p.a., and the rate offered by Goodway Ltd was 1% p.a. (Mr and Mrs So will not claim home loan interest, if available.) 8. A domestic helper at an annual wage of $40,000 was employed by Goodway Ltd and assigned to serve Mr So's family 9. Mr So paid membership fees of the HKICPA of $2.000 and HK Jockey Club of $30,000. 10. Mr. So made mandatory contributions of $18,000 to a MPF scheme. 11. On 1 June 2019, Mr So was granted an option to buy the shares of Goodway Ltd's parent company which was incorporated in Singapore. The option enabled Mr So to buy 7,000 shares at a price of $5 per share. On 1 September 2019, Mr So (1) exercised the option to buy 5,000 shares and (ii) sold the option to buy 2,000 shares to colleague for $43.000. Details of share market value were: 1 June 2019 $25 1 September 2019 $29 31 March 2020 S26 12. In order to equip himself with updated knowledge, Mr So enrolled for an evening course on Chinese Auditing with Lingnan University and paid a tuition fee of $55,000. 7 Apart from the above, the following additional information is available: 13. Mrs So has a part-time job and earned $100,000 during the year. She made mandatory coi $5,000 to a MPF scheme. She does not have any other source of income or allowable expu 14. Mr and Mrs So maintain Mrs So's mother, aged 61, who is living with Mr and Mrs So. Mrs So's father, aged 63. is currently living in the Mainland China but receives remittance from Mrs So regularly. Mr 1 June 2019 $25 1 September 2019 $29 31 March 2020 S26 12. In order to equip himself with updated knowledge, Mr So enrolled for an evening course on Chinese Auditing with Lingnan University and paid a tuition fee of $55,000. 2 Apart from the above, the following additional information is available: 13. Mrs So has a part-time job and earned $100,000 during the year. She made mandatory contributions of $5,000 to a MPF scheme. She does not have any other source of income or allowable expenditure. 14. Mr and Mrs So maintain Mrs So's mother, aged 61, who is living with Mr and Mrs So. Mrs So's father, aged 63. is currently living in the Mainland China but receives remittance from Mrs So regularly. Mr So has a father, aged 59, who was declared disabled by the Eastern Hospital during the year. He has submitted an application for the Government's Disability Allowance and approval was received in May 2019. From June 2015, he is staying in a registered Nursing Home in Hong Kong at a cost of $10,000 per month, which was paid by Mr So. 15. During the year, Mr So made various charitable donations in an aggregated amount of $200,000 to The Community Chest of Hong Kong. Required: Compute the net chargeable income of Mr So under separate taxation for the year of assessment 2019/20. Exercise 4.1 Panda Limited is a manufacturing company with annual accounts made up to 31 March As at 1 April 2019, the tax written down values for tax purposes of the company's plant and machinery were as follows: 20% pool $200,000 30% pool $300,000 During the year the company purchased (a) a new manufacturing machine (30%) on hire-purchase terms for a price of $450,000. The company paid a deposit on the machine of $150,000 and the balance was payable by 20 monthly installments of $18,000 each. The first installment was paid on 31 January 2020. The machine replaced an old machine which was obsolete and scrapped. The written-down value for tax purposes of the old machine was $15,000. (b) a second-hand car (30%) from the managing director for $150,000. The market value of the car as at the date of purchase was $160,000: and (c) a computer (30%) for the managing director's home office for $20,000. VOLTE 47 18:58 10. Exercise a... Required: Assuming that Mr Wong is chargeable under s.8(1) of the Inland Revenue Ordinance, compute the Hong Kong salaries tax payable by Mr Wong for the year of assessment 2019/20. 6 Exercise 3.4 Mr So is a HK resident has been employed as an internal auditor by Goodway Lid, a company incorporated and carrying on business in HK. During the year ended 31 March 2020, Mr So has the following income and expenditure: 1. A monthly salary of $50,000 per month. 2. A bonus of $20,000 which was approved during a Board of Directors' meeting held on 15 March 2020, was received on 15 April 2020. 3. A meal allowance of $20,000 of which only $18,000 was actually expended. 4. During the year, Mr and Mrs So went on vacation trip to Thailand. Mr So received a holiday passage from Goodway Ltd in the sum of $10,000. 5. A reimbursement of medical expenses in the sum of $35,000 from Blue Cross Medicare Scheme. Goodway Ltd paid an annual premium of $5,000 for each member of staff. 6. A company-owned car (worth $380,000) was provided to Mr So for his own use. In addition, Mr So was reimbursed $500 per month to cover his petrol cost. 7. During the period from 1 April 2019 to 30 September 2019, Mr and Mrs So lived in a leased flat at a monthly rental of $30,000, out of which $25,000 was reimbursed by Goodway Ltd. With effect from 1 October 2019, Mr and Mrs So moved into a newly acquired property in Wanchai. The property cost was $6 million amd was financed by a low interest mortgage loan offered by Goodway Ltd. The commercial rate at that time was 3% p.a., and the rate offered by Goodway Ltd was 1% p.a. (Mr and Mrs So will not claim home loan interest, if available.) 8. A domestic helper at an annual wage of $40,000 was employed by Goodway Ltd and assigned to serve Mr So's family 9. Mr So paid membership fees of the HKICPA of $2.000 and HK Jockey Club of $30,000. 10. Mr. So made mandatory contributions of $18,000 to a MPF scheme. 11. On 1 June 2019, Mr So was granted an option to buy the shares of Goodway Ltd's parent company which was incorporated in Singapore. The option enabled Mr So to buy 7,000 shares at a price of $5 per share. On 1 September 2019, Mr So (1) exercised the option to buy 5,000 shares and (ii) sold the option to buy 2,000 shares to colleague for $43.000. Details of share market value were: 1 June 2019 $25 1 September 2019 $29 31 March 2020 S26 12. In order to equip himself with updated knowledge, Mr So enrolled for an evening course on Chinese Auditing with Lingnan University and paid a tuition fee of $55,000. 7 Apart from the above, the following additional information is available: 13. Mrs So has a part-time job and earned $100,000 during the year. She made mandatory coi $5,000 to a MPF scheme. She does not have any other source of income or allowable expu 14. Mr and Mrs So maintain Mrs So's mother, aged 61, who is living with Mr and Mrs So. Mrs So's father, aged 63. is currently living in the Mainland China but receives remittance from Mrs So regularly. Mr 1 June 2019 $25 1 September 2019 $29 31 March 2020 S26 12. In order to equip himself with updated knowledge, Mr So enrolled for an evening course on Chinese Auditing with Lingnan University and paid a tuition fee of $55,000. 2 Apart from the above, the following additional information is available: 13. Mrs So has a part-time job and earned $100,000 during the year. She made mandatory contributions of $5,000 to a MPF scheme. She does not have any other source of income or allowable expenditure. 14. Mr and Mrs So maintain Mrs So's mother, aged 61, who is living with Mr and Mrs So. Mrs So's father, aged 63. is currently living in the Mainland China but receives remittance from Mrs So regularly. Mr So has a father, aged 59, who was declared disabled by the Eastern Hospital during the year. He has submitted an application for the Government's Disability Allowance and approval was received in May 2019. From June 2015, he is staying in a registered Nursing Home in Hong Kong at a cost of $10,000 per month, which was paid by Mr So. 15. During the year, Mr So made various charitable donations in an aggregated amount of $200,000 to The Community Chest of Hong Kong. Required: Compute the net chargeable income of Mr So under separate taxation for the year of assessment 2019/20. Exercise 4.1 Panda Limited is a manufacturing company with annual accounts made up to 31 March As at 1 April 2019, the tax written down values for tax purposes of the company's plant and machinery were as follows: 20% pool $200,000 30% pool $300,000 During the year the company purchased (a) a new manufacturing machine (30%) on hire-purchase terms for a price of $450,000. The company paid a deposit on the machine of $150,000 and the balance was payable by 20 monthly installments of $18,000 each. The first installment was paid on 31 January 2020. The machine replaced an old machine which was obsolete and scrapped. The written-down value for tax purposes of the old machine was $15,000. (b) a second-hand car (30%) from the managing director for $150,000. The market value of the car as at the date of purchase was $160,000: and (c) a computer (30%) for the managing director's home office for $20,000