Answer to Question #299904 in Finance for gigi

Question

Damon is employed as a manager with REDL which conducts a property development business in HK. Damon provided the following information relating to the year ended 31/3/2022:

(1) Damon’s basic salary: $60,000 per month.

2) REDL purchased a medical insurance policy for Damon and his family at a cost of $16,000. Damon received a reimbursement of medical expenses from medical insurance scheme which cost him $12,000.

(3) REDL rented a property at a monthly rent of $15,000 starting from 1/6/ 2021 for a two-year period and provided this property rent-free to Damon.

(4) REDL provided Damon with two round-trip tickets to Paris for a holiday. The air tickets cost REDL $30,000, and Damon could sell them for $20,000.

(7) Damon’s stepmother (aged 54) lives in a registered nursing home in Shatin. The nursing home expenses of $10,000 per month were paid by Damon.

(8) Damon and his wife made cash donations totaling $10,000 to various approved charities.

(9) During the year, Damon contributed $18,000 to the MPF.

Answer 1

tax rate: from 45 thousand to 90 thousand - 7%;

annual income:

$60 000\times12=720 000$

let him be married and have one childYou can deduct the amount of 132 thousand Hong Kong dollars for living expenses (per person per year), 132 thousand for the maintenance of each non-working family member (dependants), expenses for a child in the amount of 100 thousand per year, expenses for the maintenance of grandparents (at 76 thousand for each), expenses for education (training), payments to various charitable foundations in the form of donations. Mandatory contributions to the pension fund are also deducted.

When a company pays for an employee's housing, this cash in the form of rent is not included in the employee's taxable base, while his taxable base will include only an amount of 10% of the annual cost of renting housing. And the company at the same time the cost of renting housing is deducted from income.

the tax base:

$720 000+16000+15000\times14+2\times30000-76000-132000-100000-10000-18000=670 000$

income tax:

$670 000\times0.07=46900$