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Taxpayer jailed for falsely claiming expenses of self-education and approved charitable donations after review of sentence
     With regard to a taxpayer convicted of evading salaries tax earlier, a review of her sentence was heard today (July 26) in Kwun Tong Magistrates' Courts. The defendant was sentenced to 21 days' imprisonment and fined $60,000 ($5,000 for each charge) plus a further fine of $132,852 (equivalent to 200 per cent of the tax evaded). The defendant had been remanded in custody for 21 days before sentence and hence she was released immediately.

      The defendant, aged 39, was convicted by the court on May 18 of 12 counts of evading tax, wilfully with intent, contrary to section 82(1)(c) of the Inland Revenue Ordinance (Cap. 112) (IRO). She was sentenced to six months' imprisonment, suspended for two years, and fined $60,000 ($5,000 for each charge). The Secretary for Justice subsequently made an application for a review of the sentence.

      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 court heard that the defendant claimed in her tax returns deduction of expenses of self-education at $40,000 for each of the years of assessment 2005-06 and 2006-07, and $60,000 for each of the years of assessment 2007-08 to 2010-11. The defendant's total deduction claim for expenses of self-education for the six years of assessment was $320,000. The defendant also claimed deduction of approved charitable donations totalling $58,000 for the years of assessment 2006-07 to 2011-12. The total of the two deduction claims amounted to $378,000.

      An investigation by the IRD revealed that the defendant failed to produce sufficient details or evidence in support of her deduction claims for expenses of self-education and approved charitable donations. The IRD subsequently found that the defendant had only made a donation of $200 to a charity during the year of assessment 2009-10. The total amount of the false deduction claims for the seven years was $377,800 and the total tax evaded was $66,426.

      The IRO provides that expenses of self-education paid for prescribed courses or examination fees paid to specified education providers or associations and 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 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/Tuesday, July 26, 2016
Issued at HKT 15:55
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