Peter, I've found some latest news regarding your tax matter. I think it is your former employer who didn't follow the law:
scmp.com
Expats leave $213m tax bill
JIMMY CHEUNG
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Thousands of expatriates have left Hong Kong over the past three years without paying taxes totalling $213 million, the Audit Commission has found.
Some returned and had left again because it can take more than five years to obtain a court order against departure.
The Inland Revenue Department said it would consult employers' groups on the possibility of requiring bosses to withhold enough pay from expatriate staff to cover their taxes.
But officials said invoking such powers was a sensitive issue in light of liberty of movement under the Bill of Rights Ordinance.
A random inspection by the auditor of 20 cases of departing expatriates found the tax due ranged from $37,080 to $1.24 million. Although 17 failed to give notice of departure and three made a late report, none were prosecuted and only 10 were threatened with court action seeking to bar them from leaving. But the process takes from 348 days to more than five years, and the orders were only issued after the individuals had left.
Three employees eventually came back and left again without paying the tax due.
The latest revelation by the government auditor, Dominic Chan Yin-tat, has prompted calls to require expatriates to be deemed a "high-risk" group and for them to buy tax-reserve certificates instead of paying the whole amount at the end of the financial year. Bosses who fail to alert the Government that their staff are leaving should also face tougher fines, the auditor recommends.
The Inland Revenue Department, responding to the criticisms, agreed arrangements were needed to ensure due and timely collection of taxes from "high-risk" employees. Employers are required by law to tell the Inland Revenue Department within one month of the departure of their staff. Those who fail to comply face a maximum fine of $10,000.
The auditor's report, released yesterday, said "substantial" amounts of salary tax were written off because most of the departures were not reported.
"It is believed that a large portion of tax write-off cases were related to employees who were recruited from outside Hong Kong and who left Hong Kong on termination of their employment without first paying their tax," the report says.
It estimated that the write-off was $59 million in 1997-98, $77 million in 1998-99 and $77 million in 1999-2000. The latter amount represented 40 per cent of salary tax written-off last year and involved 739 individuals. About $37 million had been recovered from people who returned to Hong Kong to work again. "They were able to leave because the departure prevention direction was issued after the date of their last departure," the report says.
"If the amount of tax written off attributable to employees in high-risk groups continues to be substantial, the department should consider the feasibility of requiring them to purchase interest-bearing tax reserves as income is earned in order to provide security for the payment of tax."
The report also criticised the department for scrapping the regular inspection of employers' tax returns on staff payments since 1996. A random check on 10 cases found only one employer had been consistent in reporting staff salaries. It warned that without such a cross-checking mechanism, employees who under-reported their earnings might be unchecked.
The department said it relied on an "honour system", where tax returns would be accepted in good faith. It said previous experience showed the revenue recovered did not justify the cost of regular checking.
A government spokesman last night said a group chaired by an assistant commissioner had been established to examine the audit recommendations. |
