资讯
Mar-25-2009 HK IRD issues revised DIPN 10 on the Charge to Salaries Tax
On 27 June 2007, the Inland Revenue Department (IRD) of Hong Kong (www.ird.gov.hk)
issued a new version of Departmental Interpretation & Practice Notes No. 10 (“DIPN 10”)
which was first issued in January 1982 and revised in December 1987 after the High
Court decision in Commissioner of Inland Revenue v. George Andrew Goepfert, 2
HKTC 210.
In the present June 2007 version of DIPN 10, the IRD does not seek to introduce a new
approach in determining the source of employment but sets out in clearer terms the
IRD’s practices in determining the source of employment. The IRD still holds the view
that the question of Hong Kong or non-Hong Kong employment can be resolved by
considering the three factors, namely,
(a) contract of employment,
(b) residence of the employer, and
(c) place of payment of remuneration.
Since the issue of the 1987 revision of DIPN 10, the Board of Review had heard over 30
cases on the source of employment. While most Boards had taken into account the
above-mentioned three factors in their decision, some Boards had expressed the view
that the 1987 revision was inaccurate and misleading and the three-factor test
promulgated in the Notes was contrary to the “totality of facts” test set out by
MacDougall, J. in the Goepfert decision. Hence, the IRD decided that there is need to
update the 1987 version of DIPN 10.
However, in the course of examination, the IRD may need to look further than the
external or superficial features of the employment. In determining where the source of
the employment is located the IRD will take into account all the relevant facts, with
emphasis on:
(a) where the contract of employment was negotiated and entered into, and is enforceable, whether in Hong Kong or outside Hong Kong;
(b) where the employer is resident, whether in Hong Kong or outside Hong Kong; and
(c) where the employee’s remuneration is paid to him, whether in Hong Kong or outside Hong Kong.
