Taxpayer convicted of falsely claiming deduction of approved charitable donations
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The defendant, aged 51, is a regional sales director of a property agency company in Hong Kong. She pleaded guilty to six counts of evading tax, wilfully with intent, by making false statements in connection with claims for deduction of approved charitable donations in her tax returns for the years of assessment 2005-06 to 2010-11, contrary to section 82(1)(c) of the Inland Revenue Ordinance (Cap. 112) (IRO).
The court heard that the defendant claimed in her tax returns deductions of approved charitable donations totalling $469,400 for the years of assessment 2005-06 to 2010-11. When being investigated by the Inland Revenue Department (IRD), the defendant alleged to have made donations mainly to a particular charity but she failed to produce any evidence in support of her claims for deduction of approved charitable donations. After making enquiries, the IRD found that that charity received two donations in the amounts of $20 and $2,000 from donors whose names were the same as the defendant's during the years of assessment 2005-06 and 2010-11. After excluding the said two donations, the total amount of false deduction claims for the six years was $467,380 and the total tax evaded was $78,737.
The IRO provides that a donation of money to any charitable institution or trust of a public character which is exempt from tax under section 88 of the IRO or to the Government for charitable purposes is 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.
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/Wednesday, July 13, 2016
Issued at HKT 15:01
Issued at HKT 15:01
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