A taxpayer was convicted on April 27 at Kwun Tong Magistrates' Courts of making false statements in seven tax returns wilfully with intent to evade salaries tax. She was sentenced today (May 18) to six months' imprisonment, suspended for two years, and fined $60,000 ($5,000 for each charge) after being remanded for 21 days.
The defendant, aged 39, is a bank manager. She pleaded guilty to 12 counts of evading tax, wilfully with intent, by making false statements in connection with claims for deduction of expenses of self-education and approved charitable donations in her tax returns for the years of assessment 2005-06 to 2011-12, contrary to section 82(1)(c) of the Inland Revenue Ordinance (Cap. 112) (IRO).
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.
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.