PRESS RELEASE

(Source : Information Services Department)

Jail sentence and fine for two property owners omitting rental income and falsely claiming deduction of home loan interest

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     A couple were convicted on September 26 at the Kwun Tong Magistrates' Courts of evading taxes and were sentenced today (October 15) after being remanded for 19 days. The first defendant was sentenced to nine weeks' immediate imprisonment and fined $288,794, equivalent to 200 per cent of the tax evaded. The second defendant was sentenced to four weeks' immediate imprisonment and fined $134,398, equivalent to 200 per cent of the tax evaded. The first defendant lodged an appeal against the sentence immediately and was granted bail by the Magistrate.  

      The first defendant, aged 51, pleaded guilty to six counts of evading tax, wilfully with intent, by making false statements in tax returns furnished under the Inland Revenue Ordinance (Cap. 112) (IRO) for the years of assessment 2008-09 to 2013-14, contrary to section 82(1)(b) of the IRO. The second defendant, aged 55, is the husband of the first defendant. He pleaded guilty to four counts of evading tax, wilfully with intent, by making false statements in tax returns furnished under the IRO for the years of assessment 2011-12 to 2014-15, contrary to section 82(1)(b) of the IRO.

      The court heard that at relevant times, each of the two defendants owned four properties. In their tax returns, both defendants declared that they did not have any solely-owned properties which were let during the years. The first defendant also declared in her tax return for the year of assessment 2008-09 that she occupied one of her own properties as a residence for the full year and claimed a deduction of home loan interest thereon. An investigation by the Inland Revenue Department (IRD) revealed that the two defendants had all along resided at one of the properties owned by the second defendant. The remaining seven properties owned by the couple were let and both defendants received monthly rental through their personal bank accounts. The first defendant omitted a total rental income of $1,186,155 in her tax returns for the six years of assessment 2008-09 to 2013-14 and made a false claim for a deduction of home loan interest in the amount of $12,210 in her tax return for the year of assessment 2008-09. The amounts of property tax and salaries tax evaded are $142,321 and $2,076 respectively, for a total of $144,397. The second defendant omitted a total rental income of $564,046 in his tax returns for the four years of assessment 2011-12 to 2014-15. The amount of property tax evaded is $67,199.

      A spokesman for the IRD reminded 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.
  

Ends/Tuesday, October 15, 2019
Issued at HKT 17:35

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