PRESS RELEASE

(Source : Information Services Department)

Taxpayer jailed for falsely claiming deduction of self-education expenses after review of sentence

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    With regard to a couple convicted of evading salaries tax earlier, a review of their sentences was heard today (December 4) in Kwun Tong Magistrates' Courts. The first defendant was sentenced to two months' immediate imprisonment and fined $90,000 ($10,000 for each charge) plus a further fine of $78,407 (equivalent to 100 per cent of the tax evaded). The second defendant was sentenced to four months' imprisonment, suspended for three years, and fined $70,000 ($10,000 for each charge) plus a further fine of $49,256 (equivalent to about 116 per cent of the tax evaded). The first defendant indicated that he would lodge an appeal against the sentence and was granted bail.

    The first defendant, aged 49, was convicted by the court on July 7 of nine counts of evading tax, wilfully with intent, contrary to section 82(1)(c) of the Inland Revenue Ordinance (Cap. 112) (IRO). He was sentenced to two months' imprisonment, suspended for three years, and fined $90,000 ($10,000 for each charge). The second defendant, aged 44, was convicted by the court of seven counts of evading tax, wilfully with intent, contrary to section 82(1)(c) of the IRO. She was sentenced to two months' imprisonment, suspended for three years, and fined $70,000 ($10,000 for each charge). The Department of Justice subsequently made an application for a review of their sentences.

    The Inland Revenue Department (IRD) welcomes the verdict and reminds taxpayers that tax evasion is a criminal offence under the IRO. Upon conviction, the maximum penalty for each charge is three years' imprisonment and a fine of $50,000 plus a further fine of three times the amount of tax evaded.

    The first defendant claimed in his tax returns deduction of self-education expenses at $40,000 for each of the years of assessment 2002-03 to 2006-07 and $60,000 for each of 2007-08 to 2010-11. An investigation by the IRD revealed that the first defendant failed to produce any details or evidence in support of his deduction claims for expenses of self-education. He alleged that the self-education expenses claimed were paid for personal tuition fees related to job enhancement and that he did not know such fees were not deductible. The total amount of the false deduction claims for the nine years was $440,000 and the total tax evaded was $78,407.

    The second defendant claimed in her tax returns deduction of self-education expenses at $40,000 for each of the years of assessment 2002-03 to 2006-07, and $29,600 and $22,000 for 2007-08 and 2010-11 respectively. An investigation by the IRD revealed that the second defendant failed to produce any details or evidence in support of her deduction claims for expenses of self-education. She alleged that some of the expenses of self-education were private tuition fees, and that she did not know such fees were not deductible. The total amount of false deduction claims for the seven years was $251,600 and the total tax evaded was $42,456.

    The IRO provides that self-education expenses paid for prescribed courses or examination fees paid to specified education providers or associations are tax deductible. Documentary evidence in support of deduction claims should be retained for seven years (i.e. six years after the expiration of the relevant year of assessment). The IRD will conduct random checks on deduction claims. Taxpayers will be asked to produce supporting documents when their cases are selected for audit.

Ends/Friday, December 4, 2015
Issued at HKT 17:15

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