Does language influence thinking skills or cognition Essay

Does language influence thinking skills or cognition - Essay Example All these include some of the questions several philosophies within cognitive science are trying to answer. For a much longer period, the thought that language might influence thought was considered wrong. Several data analysis have been collected through most parts and the end results show that, individuals who speak diverse dialects do indeed think differently and that even grammar can intensely influence how most people perceive the world. To elucidate the stated thought, let us ask ourselves a simple question; how would our lives be if we had never learned any of the languages? Could we still have friends around us, hold any particular job, have a relationship or family, get an education, explore our gifting or maximize our potential? Language is thus essential and entirely part of our lives, that it’s even hard to imagine life without it. A four-year-old in one society can perform a task with much ease as opposed to an intellectual in another society. This is a huge difference in cognitive strength and the surprising answer to this cause is the language. This theory goes back to the centuries with philosophers Sapir and Whorf emphasizing that, variances in languages such as English and Hopi, lead to the difference in thinking (Eysenck & Keane, 2000, p. 122-24). This thought however was met with serious criticism over time as philosophers argued that, the theories were not supported by much proof. However, decades later, it is still evident that language shapes thinking. The results have had a great influence in law, education and even politics. Speakers of diverse languages also vary in how they define events and, as a result, how they can remember who did what and so forth. All events, even instant accidents, are complex and need us to interpret what happened. Take, for instance, former vice president Dick Cheney’s accident, in which he unintentionally shot Harry Whittington. One could say that it seemed as if

Set of laws governing public and private security agencies Essay

Set of laws governing public and private security agencies - Essay Example The rate of fatal crimes like homicides and cold blooded murders rose to an unacceptable level for the public. On the other hand the governments around the world blamed persistent economic recession, for their inability to invest in the betterment of the security setup. This above mentioned problem gave rise to the development of privately owned security companies, which worked for the last two decades to provide adequately acceptable security, with the help of latest technology. They are also fairly successful in fulfilling their promises, which compelled the general public to trust them more often. This trend led to the higher level of acceptability of these agencies in the society. According to some famous researchers, this fashion led to cause the shift of power needed to manage the security setup from federal agencies to general public and organizations, thus resulting in the decentralization of authority among civilians (Benson, 2007), who possess the money to hire their own ar my. This phenomenon caused the sense of inequity and insecurity among those who are weak. As a consequence, the prevalence of fear increased in the community. This practice also fueled the cold war for the authority among private and public security agencies, which impacted negatively on the standards of the already decaying security setup. However, the roots of these private security providers could be found in the large scale layoffs in military, after the end of cold war. This left, many highly skilled militants out of job. Due to this reason, they formed collations with each other and started robbing the government’s military facilities in the beginning (Schreier & Caparini, 2005). Thus with the passage of time these organizations formalized their existence and structure. Another important facet of this phenomenon is the consistent collaboration, between the government and private weapons producers, through which the former entity is getting war equipment from the latter one (Avant, 2003). This trend is playing a significant role in strengthening the weapon producers in terms of influence. These non-government security organizations are also used for the following purposes The employees of privately managed security companies are often sent on the harmony preserving missions of UN, because of the fact, that most of the developed nations do not deploy their military forces on these type of missions, due to their political reasons (Schreier & Caparini, 2005) These forces are also deployed in the case of large scale calamity effecting any nation, with the mission of helping humanity (Schreier & Caparini, 2005) They can also be used in support capacity in cooperation with other federal law enforcement agencies (Schreier & Caparini, 2005) Governing Laws for Public Reinforcement Agencies The major purpose of these organizations is to protect the citizens of the country from any kind of loss, due to theft, murder, fraud and other similar activities. They a re under strict monitoring of the government, which results in highly formalized chain of command structure (Glover, 2012). Following are the laws governing formal security operations in US implicated. The police officers cannot investigate any citizen without legitimate reasons They cannot arrest anyone without permission from government officials They cannot search anyone without

English Coursework - Titanic Essay Example for Free

English Coursework Titanic Essay Many people across the world watch films. It is so popular because it puts a story on the screen and into life so that people can see it. People watch films for the entertainment value, or are simply too lazy to read and enjoy the magic of a book. The advantages of watching a film at the cinema rather than on video is the bigger screen, and the surround sound, also the atmosphere. This all adds up and creates a bigger impact than a video. People make films to tell a story or get a message across, such as Pearl Harbour, which tells us the story of a real historical event through the eyes of a fictional love story, very much like Titanic. Or Shrek, which puts a message across through the tale. Some films are just made purely for entertainment value, or to make money, such as the Harry Potter films, that were built up from a very popular book franchise. In film they use different camera shots for different reasons, such as:- Close Up with this shot, you can see the emotion on the face of the character; they use it to show the emotion more clearly. Long Shot The use this type of camera angle to show a large shot of the set or in the case of Titanic the boat. Point of view shot These are used to show you what the character can see, a good example of this in Titanic is when Rose is stood on the end of the boat looking out to sea, Medium Shot These show the characters body and face, and are used a lot. Zoom in/out These can be used to show a long shot of the set and then zoom in to show the emotion on the characters face instead of switching from Long shot to Close-up. Panning This can be used to show a large area, or a when a character is walking. An example of this on Titanic is when they go from the back of the boat to the front. They also use Sound Effect to make what is happening sound more real, such as an explosion or band. They also use backing tracks, which can be used to emphasise the emotion a character is feeling. For example, if it was sad, they might use a love song. They use costume to show you what time something was set it, or the class of the people, particularly shown in Titanic, as Jack is very poor and Rose is rich. The characters who wear the costumes are also very important. They have to look the part and sound the part, not just be able to read the lines. They have to act the way a person of that time would. For my GCSE coursework, I will be writing a Media essay on Titanic, which was directed by James Caremon. It was made in 1997, and was the most expensive film made at the time. It won many awards, and is one of the great love stories told, based on a real historical event. The Titanic was quoted as being Titanic, wasnt just another ship, it was bigger, faster, and more luxurious than any other ship before her. She had two sister ships, The Olympic and The Britannic, all of which were owned by White Star Line, a series of very luxurious ships. It was built in Harland and Wolff Shipyard, and was 882 ft 6 inches, by 92 ft 6 inches. It had 2212 people onboard, 20 lifeboats, which only had room for 1178 people. This was because they thought that the ship was un-sinkable, and didnt think they needed more. It only had 705 survivors after it sank. The Titanic was under the control or Captain E.J Smith, a much respected Captain. Some people would not travel if the boat was not under his control. It set sail on April 10th 1912 from Cherbourg France, to Queensland Ireland, and then continued out to sea. Titanic sank at 2.20am, on April 15th. The Titanic sank because it hit an ice berg, which pierced its hull and flooded it, making it sink. Captain Smith had ignored the iceberg warnings. This was The Titanics maiden voyage. Disaster is defined as sudden or great misfortune, this means something that happens, which usually kills a lot of people, this could also be linked to tragedy, which is defined as sad event; dramatic, literature word dealing with serious, sad topic, which I think means when something bad happens, which brings sorrow, not necessarily to just one person. I think that the amount of people does alter the seriousness of a disaster because it makes it harder to cope with. A Man-Made disaster is something that man has inflicted upon itself, such as when the Twin Towers got destroyed, many people died. I think that a man-made disaster is sometimes worse that a natural one, because you cant stop a natural disaster, but to inflict one, is just wrong. I think that James Camerons depiction of Titanic is very accurate to the real event. Although he told us the story through the eyes of a romantic tale, all the facts are very accurate. The times, the date, the crew, even the people who were on board, such as John Jacob Astor who was the richest person on the ship, is in the film. All of the crew bare a striking resemblance to the real people and are names the same, particularly in the case of Captain Smith. The Real Captain E.J Smith Captain E.J Smith in the film The numbers of people that died and the ways that they died are very accurate, many people froze in the water, and other chose to go down with the ship. Also the musicians, who are in the film, go down playing, which was noted by the survivors. I think that we are told the real historical every through a love story because it gets us more involved, we can relate to the characters and it opens out emotions more when the tragedy happens. I think that the opening of a film is important because it draws the person in. In Shrek it is funny, which makes the person want to watch more, and also shows you that it is a comedy film. The titles tend to show you what type of film a film is. It also shows you what time period it is set in, and what genre it is. They usually have the theme song for the film on in the background. In the case of Titanic there is the slow adaption of the theme song playing, and the real shot filmed of the real Titanic. I think this shows you that it will be a sad film, but the pace of the music. It then switches into the film and does a panning shot of the film, to show you how big and magnificent it is. Also the reaction of the people towards it, which shows you that it is even magnificent for them, even though it is set in their time period. Setting is important, because it shows is where and when the film is set. A good example of this in Titanic, is the way the different groups of people are treated at the beginning. The rich are aloud to stroll onto the boat, with their luggage being taken care of, bringing dog and other pets. Whereas the poor have to go through lice inspections just to get on, but the rich can bring animals. This shows you how people were treated and in what time period it is set, and is typical of Edwardian England. Rose is first introduced to us twice, ages 101 and when she was younger going onboard Titanic. When she is older, I think she seems like a very normal nice old woman, mid-class and has a caring family. Whereas the younger Rose seems like a bit of a snob by the way she reacts to the Titanic when she first sees it. She is obviously very rich, and leads an upper-class life. We can tell that she is a nice person, even though she wears a snob mask at the beginning of the film, later on we find out the true her. She is shown as someone who is not afraid to ask questions, unlike many women of that time. She asks about the lifeboats and their capacities. When we first meet Jack, he is gambling in a bar. We can tell that he is poor and doesnt have much to his name. We can tell that he is very cunning by the way he plays cards and wins. He is shown as a very nice person who cares deeply for Rose. He doesnt seem to care about the class rules, which shows he is a true romantic because he is willing to defy those rules for love. He cares very much about Rose and her safety, even over his own. This is shown at the end, when he lets her sit on the floating table, while he stays in the water, knowing that he will freeze to death. Cal is Roses fiancà ¯Ã‚ ¿Ã‚ ½ and is introduced getting out of his very expensive car and getting his man servant to do favours for him. This shows us that he is very rich and has some power. He is shown as quite a snob, and only wants Rose as a trophy on his arm. He is selfish and hits her if she does wrong. He doesnt agree with Roses friendship with Jack, which later turns into love. Molly Brown is shown as quite a loud mouth and is not liked very much by some of the rich people because she was not brought up with money, she is what they called new money her husband struck rich recently, and they did not like this. She is shown as a very nice woman because she helps out Jack when he is going to the dinner with them. Roses Mother is shown as a snob; all she seems to care about is the way that her family is seen and how much money they have. She wants Rose to marry Cal just so she can have money again. She doesnt seem to care much about Rose or her feelings, but in the end we find out how distraught she is about Rose not getting in the lifeboat when she has the chance and shows her true feelings. Mr. Andrews in the man responsible for making the Titanic, he is so sure that it will not sick, and doesnt put enough life boats onboard. He is shown as a very kind man, who cares very much for Rose. He helps her to safety when the ship is sinking, but does not get on a lifeboat himself. I think this is because distraught about his ship sinking and by the fact that there werent enough life boats, which he decided, and now people would die because of the decision. Mr. Ismay, was the designer of Titanic, he just wanted the fame by having her in the news, he pushed the engines too hard by making them go faster and faster when they didnt need to. If the Titanic wasnt going so fast she might have been able to turn in time and not crash. Ismay is shown as a coward in the film, he is expected to go down with the ship, but instead he jumps on a lifeboat when no one is looking. The Captain is shown as a very important and respected man. Although it was Ismay who suggested going faster, is was the Captain that made it so. I think that he is depicted as quite a noble man because he goes down with the ship. Rose and Jack first properly meet at the back of the ship when Rose is about to commit suicide. He shows his caring by telling her that hell jump in after her even if it means his own death. This becomes one of the themes of the film You Jump, I Jump! Jack first sees Rose as she is looking over the railing of the upper-class deck, it is love at first site and he knows that he has to be with her. I think that this is significant, because although he doesnt know her he still wants to be with her, even thought he knows there is a vast class difference. I think the setting is significant in the places where the rich and poor are kept. The rich have expensive, luxurious rooms and a fancy dinning area, whereas the poor are kept in bunkers and have a large hall where the dance and socialise. The places where the poor are kept do not look expensive and are very dirty, and infested with rats. As the ship is sinking, it uses many shots, Long shot and close up. It uses long shots to show the ship from afar, there is not music and it is all dark. This shows the isolation of the ship and that it is very unlikely someone will arrive in time to save them. The close up shows the ships breaking apart and falling, it has very dramatic music in the background, and lots of screaming. The characters are all running around franticly and all the glamour of the ship seems to of faded. The atmosphere is created by the screams of the people, watching the ship fall apart. The emotion is created, by watching what is happening to these people, freezing to death, crying for help, desperately trying to get on a life boat. So desperate that they cut one down whilst drowning. My favourite parts of the film are where the ship sinks, and when Jack and Rose are stood on the edge of the ship. There is soft romantic music in the back ground, the main theme song, and there are close ups of their faces, showing the love on them, panning shot around them, stood on the edge, and point of view shots, where you see what Rose does on the edge of the ship. I think this sequence is important in the film because it shows that Rose doesnt care about class boundaries either, she returns to him, and still loves him, even thought he is of a low class. Also it is the last time Titanic sees daylight. I think that A Night to Remember, another depiction of the historical event, made is 1958, and directed by Roy Baker, is similar to that of Titanic. The most fundamental difference centres on exactly what question each film is answering. A Night to Remember answers the question How did the tragedy happen? whereas Titanic answers What was it like to live through it? A Night to Remember shows us The Californian, the ship that failed to answer to Titanics distress call, whereas we arent shown that in Titanic. The shots are not that different, they use the same type, but the point of view is very different, Titanic uses a 1st person narrative, whereas A Night to Remember uses the 3rd person narrative. The treatment of the passenger is similar, but I think that the people in the life boats were treated differently on Titanic than A Night to Remember. I think that the way they are treated in Titanic is more like they would be. I think that James Cameron decided to have Rose die at the end of the film because it lets her return to Jack, and that his love for her is still strong, she has finally let go of what happened. She does this by dropping the Heart of the Ocean in the ocean. I think that it shows Rose with all her pictures with her because it shows how far she has come in life, the impact that Jack had on her. It shows her riding on a Horse like a man would do at that time and various other things she wouldnt have done if she continued as she was before meeting Jack, like fly a plane. If she hadnt met Jack, she wouldnt have done any of these things. I think that the theme tune is significant, because it is titled My Heart Will Go On, I think this is saying that Roses love for Jack will continue even though he is dead, which is shown when she returns to him at the end. He is still waiting for her, and he still loves her. Even though their physical love has ended, their mental love will go o forever. I think that the film Titanic was made to retell the tragic events that happened, to make our generation live it all over again, get involved in it, be sad about it. By telling us the story, we can tell what it would have been like for someone who went through that, and we can emphasise with them more, and if a film can make someone do that, I think that it make them a better person for it. I think that the events that happened on April 14th 1912 are some of the most horrific and saddest I have ever heard of, and I think that this is a great film and it will truly be loved for generations to come.

Values Of Turkey According To Hofstedes Values Politics Essay

Values Of Turkey According To Hofstedes Values Politics Essay Modern day Turkey has its roots in the former Ottoman Empire. The Ottoman Empire had begun in the 13th century and stretched across the Middle East, including parts of Europe, Asia, and Africa. The Ottoman Empire largely collapsed after defeat in the First World War. After the World War, the Turkish War of Independence resulted in Turkey, in its modern day form, being founded in 1923. (CIA World Factbook) Istanbul, Turkeys largest city, also goes back to ancient times as it was formerly known as Constantinople. Further back in history, it was called Byzantium. It has been part of the Ottoman Empire as well as the Roman and Byzantine Empires. After the founding of Turkey, the country operated with a one party system. The first occurrence of an opposition party winning power was in 1950, with a peaceful transfer of power. (CIA World Factbook). However, this has not always been the case. Turkey has been unstable in the past. Military coups have taken place in 1960, 1971, and 1980, with civilians regaining power each time. (CIA World Factbook) Turkeys current government is a republican parliamentary democracy. There are three branches of government. The executive branch has a president who is elected to a five year term, but has a largely ceremonial role. The prime minister is the head of the government and is appointed by the president. The legislative branch is made up of the unicameral Grand National Assembly of Turkey. The judicial system contains the Constitutional Court, functioning much like the United States Supreme Court. (CIA World Factbook). Geographically, Turkey lies in the Middle East. Most of the country is part of southwestern Asia, with a small portion spilling into southeastern Europe. The country borders the Black Sea and Mediterranean Seas. Bordering countries include Iraq, Iran, Syria, as well as Greece and Bulgaria. (CIA World Factbook) While Turkey identifies more with the Middle East geographically, the country is more European than its neighbors. Turkey is a NATO member and has been since 1952. It is also a UN member since 1945. Currently, Turkey is a candidate to join the EU. (CIA World Factbook) Turkey has a population of almost seventy-seven million, ranking it seventeenth in the world. Its population is currently growing at a rate of 1.312%. (Dept. of State) The predominant religion is Muslim, with 99.8% of the population identifying themselves as such. (CIA World Factbook). Most of the Muslim population is Sunni. The other 0.2% of the population is made up mostly Christians and Jews, however this number pales in comparison to the Islamic population. (CIA World Factbook) Economically, Turkey is fairly developed. The economy consists of a mix of modern industry, commerce, with a fair amount of agriculture. 45.8% of the labor force works in the service sector. 29.5% spend their lives working in the agriculture sector, while the remaining 24.7% are in the industrial sector. (CIA World Factbook) Turkey has a gross domestic product of $863.3 billion, ranking it 18th in the world. (CIA World Factbook). The largest industrial sector is the textile industry, making up 33% of industry in the country. Automotive and electronic industries are growing. (CIA World Factbook) Another industry in Turkey is the oil industry. Oil pipelines connecting oil from the Middle East to Europe. (CIA World Factbook) The government has been a major participant in industry, banking, transport, and communication in the past, however this role is in decline as the country has experienced a move towards privatization. (CIA World Factbook) Turkey has not been immune to the current economic downturn that is facing the world. The gross domestic product shrunk 5.6% in the past year. Turkey also faces a high external debt. $274 billion dollars are owed to various countries. (CIA World Factbook) The Corruption Perception Index gives a score based on a perceived level of public corruption, ranking 180 different world countries. Turkey scores a 4.4 on the Corruption Perception Index, on a scale from zero to ten, with lower scores indicating more perceived corruption. Turkeys moderate score of 4.4 ranks them the 61st least perceived corrupted country in the world. (Transparency International) Geert Hofstede scores countries on different cultural dimensions in order to give a better understanding of the culture of a particular country. Hofstede measures the dimensions of power distance, uncertainty avoidance, individualism and masculinity. (itim International) Turkey scores high at 66 in power distance, indicating that the level of inequality in society is accepted and embraced. Turkey scores low in individualism at 37. This shows that Turkey has a more collectivist culture. In masculinity, Turkey receives a low score of 45. The last dimension, uncertainty avoidance measures with the tolerance of uncertainty in society. Turkey scores a 85 on this dimension. (itim International) This high score indicates that Turkey has a stricter, more intolerant society. S.J. Gray expanded on the ideas of Hosfstede, using Hofstedes dimensions to form additional hypothesis about a country and its accounting systems. Grays first hypothesis states that the higher a country ranks in individualism and lower it ranks in uncertainty avoidance and power distance, the higher the country will rank in professionalism. (Gray) According the Turkeys Hofstede values, it does not fall into the professional category. At the other end of the spectrum from professionalism is statutory control; an idea stating that the people of Turkey prefer a more rule-based approach with less judgment exercised. Grays second hypothesis states that the higher a country scores uncertainty avoidance and power distance and lower it scores in individualism, the more likely the country will value uniformity. Turkeys Hofstede values indicate that Turkey does in fact have high uniformity. According to Gray, Turks value a uniform and consistent approach, rather than adjusting to individual circumstances. The third hypothesis from S.J. Gray says that a country high in uncertainty avoidance and low in individualism and masculinity will rank high in conservatism. Hofstede values for Turkey indicate that Turkey does rank high in conservatism. This idea means that Turks prefer to be conservative in their measurements, allowing for an uncertain future, rather than taking an optimistic approach that may be less accurate. Grays last hypothesis states that a country that is high in power distance and uncertainty avoidance, and low in individualism and masculinity is a country that is high in secrecy. Turkey is likely to be high in secrecy according to its Hofstede values. According to Gray, Turks value confidentiality in business information. Together, Grays hypothesis theorize that Turkey is a country valuing statutory control, uniformity, conservatism, and secrecy. This puts Turkey on par with other Muslim countries in the Middle East such as Iran and Pakistan.

Eco-Wars :: essays research papers

In recent years, a new force has been introduced to the struggle for environmental protection. The world's military looms as an ominous threat above our fragile eco-system. Even during years of peace, the military's havoc is wreaked "Not in some remote sandbox or sea lane, but within the heart of a rapidly unraveling planetary ecology, whose intricate web of intertwined lives, often trigger complex feedback processes." (Thomas). The greatest crime perhaps is the slow murder of the planet. The world has suffered more ecological damage in the past fifty years, than ever before. Oil spills, toxic dumps and nuclear testing, plague the world's resources. The majority of these originating from the world's 'protectors'. The greatest victim of all our wars, is Earth. Her sufferings coming from toxic dumping, chemical warfare and nuclear testing Perhaps the best example of a dumpsite would be Subic Bay in the Philippines. Since the end of the Viet Nam conflict, 4,000,000 gallons of untreated waste have been dumped into the bay each day. As Pentagon official David Berteau summarized "If any one nation bears the brunt of the U.S. military's practice overseas, it may well be the Philippines". It is estimated that this dumping has destroyed thousands of kilometres of coastline, and a valuable eco-system. Though this is not to imply that the Philippines are the sole victim of military dumping, indeed there are hundreds of such dumpsites across the globe. As is clearly seen in map 1.1 Indeed the weapons of war do more harm to Gaia than to any foreign soldier, Chemical warfare & High-tech weaponry of the 90's may turn out to be what eventually lays Mother Earth to rest. Chemical Warfare was introduced by German soldiers during WWI. Since then, dramatic increases in chemical weapons have put Earth on the verge of collapse. It is estimated that 240 pounds of Agent Orange, a defoliant, was dropped over S. Viet Nam during the 1960’s. This may not sound like much, but to put it in perspective, two ounces of the substance, placed in New York City's water supply, would kill every inhabitant. (Day, 208). And it will remain in the environment for centuries to come. Not so far away, more havoc was being wrought on the environment, this time due to the space race, the liquid fuel used by Soviet era missiles and rockets -- unsymmetrical dimethylhydrazine (UDMH) -- is both highly toxic and hard to remove from the environment once leaked.

Free the Children, by Craig Kielburger Essay -- abusive child labor

Iqbal Masih was just four years old when his single mother used him as collateral on a loan between a local employer of a carpet weaving factory in Pakistan to pay for her eldest son’s wedding. For the six long years he was employed, a typical workday included at least 14 hour shifts for six days a week with only one 30 minute break. Even though Iqbal lived under terrible conditions and the relentless threats of abuse, his mother had no choice but to keep borrowing money from the employer to make ends meet at home. Employers charging high interest rates and increasing the total debt owed by a family was not out of the ordinary. Masih’s employer included fines to the original loan when he erred on the job and for the daily bowl of rice—making freedom an unattainable goal. During the six years he was â€Å"employed†, the debt increased from a mere 600 rupees ($6.06) to 13,000 rupees ($13.13). But with the aid of an organization for human rights, Masih escaped at the age of ten and was soon after enrolled in school. After his escape, he helped others break free and traveled to numerous countries as an advocate against child labor. Sadly, at the young age of 12, he was murdered under mysterious conditions, which gave way to conspiracy stories. The fact that the stories from key witnesses changed on more than one occasion did not help the truth come out. Major newspapers around the world wrote about Masih’s story, even though it was often demoted towards the end of the newspaper. It was not long before both the media and the public disregarded it. A little less than seven thousand miles away from Pakistan, however, another 12-year-old boy in Thornhill, Canada devoted Masih’s story to memory, an undertaking that signified the beginning ... ...urger. Every person begins as an average person, but somewhere down the road they realize what they are doing is not enough. As a result of this enlightenment, they walk down a different path than others and stand up for what they believe in. It is this commitment that changes this ordinary person into an extraordinary individual. They embark on adventures that are said to be hopeless and succeed in attaining it. Arising from there – a tenacious resolution to do what is morally correct – nothing is no boundary for what can be accomplished. Works Cited http://history1900s.about.com/od/1990s/a/IqbalMasih.htm Craig Kielburger, Kevin Major, Free the Children, (New York: Harper Collins, 1998), p. 10. bid. Free the Children p. 280 http://www.peaceheroes.com/CraigKielburger/craigkielburgerbio.htm#Top http://www.freethechildren.org/aboutus/history-ftc.htm

Hk Tax

Edinburgh Napier University/SCOPE of City U Hong Kong Taxation LECTURE 1: Salaries tax and salaries tax planning, Double taxation arrangement with Mainland China Outline Salaries tax | |- |Scope of charge, format and presentation of salaries tax | |- |Locality of employment | |- |Taxability of fringe benefits | |Salaries tax planning | |- |Remuneration package and fringe benefits | |Double taxation relief | |- |Arrangement between Mainland China and the HKSAR | Textbook – Dora Lee, Advanced Taxation in Hong Kong, 15th edition, 2012, Pearson, Hong Kong, Chapters 2 to 5, 23 & 24 LECTURE 1: Salaries taxUnder s8 of the Inland Revenue Ordinance, salaries tax is charged on every person in respect of his income arising in, or derived from Hong Kong from the following sources: 1) an office 2) employment 3) pension Source of Income from Office The source of income from an office is determined by the location of the office, which is at the place where the central management and contr ol of the company is located. Normally, this means the place where directors hold their meetings. Once it is determined that an office is located in Hong Kong, the whole income from such office is chargeable to salaries tax. No question of apportionment arises. Source of Income from PensionThe source of income from pension is the place where the pension fund is managed. Source of Income from Employment A taxpayer having an employment located in Hong Kong (Hong Kong employment) is chargeable under s8 above. Taxpayers whose employment is not in fact located in Hong Kong (Non-Hong Kong employment) may still be liable to salaries tax if they render services in Hong Kong. The basic charge to salaries tax is specifically extended to include the income of overseas employees working in Hong Kong during visits exceeding 60 days [S8(1A)]. Hong Kong Employment a) No time-apportionment b) All income included despite part of services rendered outside Hong Kong c) Exceptions: i) rendered ALL serv ices outside Hong Kong i) visited Hong Kong for 60 days or less in a year of assessment concerned d) Relief: i) income excluded for income attributable to services rendered in that territory and foreign tax paid ii) tax credit under Double Tax Arrangement with Mainland China and other tax treaty countries According to DIPN10, the IRD accepts that employment is located outside Hong Kong where all the following factors are present: a) the contract of employment was negotiated, and entered into, and is enforceable outside Hong Kong; b) the employer is resident outside Hong Kong; c) the employee’s remuneration is paid to him outside Hong Kong. In appropriate cases, the IRD may need to look further facts.Comparison of Hong Kong employment and non-Hong Kong employment: | |Hong Kong employment |Non-Hong Kong employment | |All services rendered in Hong Kong |Taxable in full |Taxable in full | |Services partly rendered in Hong Kong |Taxable in full |Time apportionment | |All services rendered outside Hong Kong |Exempt |Exempt | |Services rendered in Hong Kong for less than 60 days or less | | | |visits in Hong Kong |Exempt |Exempt | |Services rendered in Hong Kong for more than 60 days visits in | | | |Hong Kong |Taxable in full |Time apportionment | |Services rendered in Hong Kong for 60 days or less but presence in| | | |Hong Kong did not constitute visit to Hong Kong | | | | |Taxable in full |Time apportionment | |Services rendered outside Hong Kong with foreign tax paid |Foreign services income | | | |exempt |Not applicable | If a taxpayer with Hong Kong employment is seconded to work overseas with a new non-Hong Kong employment, clear evidence must be shown such that the old employment has been terminated and that a distinctively new employment has commenced. Format of salaries tax computation – Individual |$ |$ |Section | |Income from principal employment | |A |9 | |Less: Allowable outgoings and expenses |B | |12(1)(a) | | Depreciation allowanc es | C | D |12(1)(b) | | | |E | | |Add: Rental value (10% on E) |F | |9 | | Less: Rent suffered | G | | | |Net rental value | | H | | | | |I | | |Income from other employment | | J | | | | | K | | |Less: Loss brought forward |L | |12(1)(c) | | Self-education expenses | M | N |12(1)(e) | |NET ASSESSABLE INCOME | | O | | |Less: Concessionary deductions | | | | | Approved charitable donations (limited to 35% of K) | P | |26C | | Elderly residential care expenses | Q | |26D | | Home loan interest R | |26E | | Contributions to recognized retirement scheme | S | T |26G | |Net assessable income after concessionary deductions | | U | | |Less: Personal allowances | | V |Part V | |Net chargeable income | | W | | |Salaries tax payable | | | | |Lower of (a) progressive rate on W or | | | | |(b) standard rate on U | | | | | | | | | Format of salaries tax under joint assessment |Husband |Wife |Joint | | |$ |$ |$ | |Net assessable income |X1 |X2 |X | | |== |== | | |Less: Concessionary deductions | | | | | Approved charitable donations (limited to 35% of X) | |P | | | Elderly residential care expenses | |Q | | | Home loan interest | |R | | | Contributions to recognized retirement scheme | |S |T | |Net assessable income after concessionary deductions | | |U | |Less: Personal allowances (married person’s, etc) | | |V | |Net chargeable income | | |W | |Salaries tax payable by the nominated spouse or | |the spouse who would have been liable to pay salaries tax under separate taxation. | | | | | | |100% of salaries tax will be waived, subject to a ceiling of $8,000 (2008/09). | |75% of salaries tax will be waived, subject to a ceiling of $6,000 (2009/10 & 2010/11) and $12,000 for 2011/12. |Case law establishes that income from employment: a) includes income for services rendered or to be rendered; b) excludes voluntary receipts for personal reasons; c) excludes compensation for loss of rights Assessable income includes reward for services rendered, past, pr esent and future. If the employer makes a payment to a third party for which the employer itself was solely and primarily liable, then the benefiting employee is not chargeable to tax on such benefit, unless: a) the benefit can be converted into money; or b) the payment was paid for the education of a child of the employee. c) any amount paid in connection with a holiday journey.Considering whether an income is chargeable to salaries tax: a) whether the payment is derived from an employment or office; b) whether the payment is in recognition of services rendered in the past, present or future. In D19/92, The taxpayer was offered and accepted employment by a Hong Kong company. The company paid him a lump sum at the beginning of his employment as an inducement to join the company. The Board held that this payment was incorporated into his contract of employment with the company. The source of the inducement payment was the employment of the taxpayer with the company. It was not a gift . Compensation for loss of employment Generally speaking, compensation for a loss of employment which does not represent a payment for past, present or future services is not chargeable to salaries tax.This is considered as a sum paid in consideration of the surrender by the employee of his/her rights in respect of the employment. Such payments should be distinguished from the termination gratuities which is usually relate to services previously rendered by the employee and hence taxable. The taxable termination gratuities may be related back for a maximum period of 36 months. A sum specified in the contract of employment may be taxed even though it was described as compensation for termination of employment. In CIR v Yung Tze-kwong, the Court has apportioned 10% of the severance pay as the inducement to enter into employment and 90% of the sum was attributable to restrictive covenants, which was not taxable.In Fuchs, Walter Alfred Heinz v CIR, the Taxpayer was entitled to terminati on payments according to his 3-year contract of employment. The contract of employment was terminated about two years. Under a termination agreement, the Taxpayer received a compensation made up of: †¢ Sum A – equivalent to his salary under the remaining period of his contract (12 months); †¢ Sum B – two annual salaries; and †¢ Sum C – the average of his three previous annual bonuses IRD levied tax on Sum B and C on the basis that they were paid pursuant to his contract of employment and the Taxpayer was contractually entitled to receive them on premature termination.The Court of Appeal held that Sum B and C were assessable because they were not paid in abrogation of the contract of employment but in accordance with the contract of employment. The Court of Final Appeal upheld the decision. Payment in lieu of notice After the decision of Fuchs case, IRD is now of the view that payment made in lieu of notice is an incentive for joining an employment and the payment is made under the terms of employment contract, the amount is chargeable to salaries tax if it accrues to an employee on or after 1 April 2012. EMPLOYEE SHARE-BASED BENEFIT Share Option Benefit Time of assessment At the time of exercise, assignment or release of share option. Taxable Gain Situations |Assessable Amount | |Exercise of option |Market value at the time of taking up the shares over total consideration | |Option assigned/released |Consideration for assignment/release of option less total consideration | Timing of exercise of share option According to the DIPN 38, a taxpayer is generally considered to have exercised an option when he has taken whatever steps are necessary to convert the offer contained in the option agreement into a contract to purchase the relevant shares Locality of share option benefits The gain is chargeable to Salaries Tax if it comes within the scope of s 8(1)(a), ie if it can correctly be described as â€Å"income arising in or de rived from Hong Kong†. If a person had a Hong Kong employment at the time of grant of the right, the income is also regarded as having been derived from Hong Kong.If a right is granted to an employee on an unconditional basis during a year of assessment in which the person renders all services in respect of his employment outside Hong Kong, any gain subsequently realized, even if realized whilst the person is working in Hong Kong will not be charged to Salaries Tax. No liability to salaries tax arises where a right is granted on an unconditional basis prior to a person rendering any services in Hong Kong, notwithstanding that the right may be exercised after the person commences to render such services. Where a person with a non-Hong Kong employment is granted the right subject to a vesting period during which services are rendered both in and outside Hong Kong, the gain should to some extent be chargeable to Salaries Tax based on the following formula: Days spent rendering se rvices Gain calculated in accordanceIn Hong Kong during vesting periodX with s 9(1)(d) and s 9(4) Total number of days in vesting period Definition of ‘vesting period’: ‘Vesting period’ normally means the period from the date of grant of the option to the first available date that an employee is entitled to exercise the option. An option will generally be considered to have vested when all conditions for its exercise have been satisfied. E. g. an employee required to work for a certain period of time. Share Award Benefit Shares obtained through share-based remuneration schemes are taxable perquisites forming part of a taxpayer’s employment income. When does the perquisite accrue to the employee?Referring to section 11D(b), this means â€Å"entitled to ownership of the shares†. Generally, two approaches in assessing such awards, viz: ‘Upfront’ and ‘Back End’. Summary of the two broad approaches: | |‘Upfrontâ€⠄¢ approach |‘Back End’ approach | |Vesting period applies? |No. |Yes. | |Time of assessment |Upfront, ie at the time of the grant. |Back end, ie upon fulfillment of conditions. | |Valuation |Market value at time of grant. |Market value at time of fulfillment of | | | |conditions. | |Discount in valuation? |Yes.The discount is to be determined in the |No | | |light of the facts of each particular case. | | |Distributions |Received during the restriction period: Not |Received during the vesting period: Taxable, | |(eg dividends, bonus shares) |taxable; regarded as investment income since |since employee is entitled to the shares only | | |employee is entitled to the shares at the time|at the end of the vesting period. | | |of award | |Example (Extracted from DIPN 38, eg 11) The taxpayer had a non-Hong Kong employment. On 1 May 2005, he was granted 10,000 shares by his employer subject to a vesting period. Shares would only be vested on condition that he remained an em ployee of his company on the vesting dates. 5,000 shares vested in him on 1 May 2007 and the remaining 5,000 on 1 May 2008. The number of days in Hong Kong and outside Hong Kong was ascertained as follows: | |(A) |(B) |(C) |% | |Year ended |Days in Hong Kong |Days outside Hong Kong |Total days |(A)/(C) | |31. 3. 006 |275 |90 |365 |75 | |31. 3. 2007 |260 |105 |365 |71 | |31. 3. 2008 |250 |116 |366 |68 | |31. 3. 2009 |255 |110 |365 |70 | The assessor and taxpayer agreed that the â€Å"back end† approach is applicable to assess the vested shares. The share-award benefits are assessed as follows: ) the value of the first 5,000 vested shares is to be included with the taxpayer’s other remuneration in the year of assessment 2007/08 and 250/366 of the value is to be subject to tax, while b) the remaining 5,000 vested shares is to be included in the year of assessment 2008/09 and 255/365 of their values is subject to tax. Holiday journey benefits Starting from 1 April 2003, ho liday warrant or allowance to purchase holiday warrant will be subject to salaries tax. Section 9(2A)(c) provides that ‘any amount paid by an employer in connection with a holiday journey’ is taxable. The term â€Å"holiday journey† is defined in section 9(6) as either: a) a journey taken for holiday purposes, or b) where a journey is taken for holiday and other purposes, the part of the journey taken for holiday purposes. The amount to be assessed is based on the actual amount paid by the employer, i. e. the actual costs that an employer pays. DIPN 41 Taxation of Holiday Journey BenefitsThe CIR issued DIPN 41 Taxation of Holiday Journey Benefits in August 2003 to lay down broad statements on the interpretation and practice to be adopted by the Inland Revenue Department in relation to the above amendments. (a) Business trip (including a holiday incidental to such business trip) will not be taxable. (b) If it could be established that a journey is not for holiday, such as for the relocation of an employee and his family – i) in Hong Kong upon assumption of a new post or ii) out of Hong Kong upon termination of an existing post here, the payment made by the employer will not be taxable. For such trips, any stop over visits to another place en route to or from Hong Kong would be disregarded as a concession. c)If an employer was given a certain mileage for a business trip paid by his employer and he redeemed it for a free ticket to a territory for holiday, the value of the free ticket is not assessable as no payment was made by the employer in connection therewith. Rental refund or Cash allowance It is necessary to decide whether a sum is a rental refund and a cash allowance paid by an employer to his employee. A cash allowance is fully taxable as an income from employment. In CIR v Page (2002), to qualify as a refund of rent, there is no requirement for sufficient control, the production of tenancy agreement and/or rental receipt to the employer.However, the taxpayer must prove that the intention of the employer is to refund the rent paid and not to pay an allowance that can be spent in whatever way the employee wishes. For computation of rental value, it is based on a certain percentage on net assessable income (before self-education expense) depending on the nature of accommodation. (Refer to D91/04 regarding the definition of hostel, boarding house & hotel). Allowable outgoings and expenses include all outgoings and expenses (other than domestic, private or capital expenditure), wholly, exclusively and necessarily incurred in the production of the assessable income. There is a distinction between expenses incurred ‘in’ the production of the assessable income and expenses ‘for’ the production of the assessable income.The expression ‘in the production of assessable income’ bore the same meaning as ‘incurred in the performance of the duties of the office or employmentâ €™ and without such expenses the employee may not be able to earn the income. CIR v Humphrey (1970) 1HKTC451 – traveling expenses incurred by a taxpayer in getting to his place of employment were not allowed (when traveling to his place of work, the taxpayer was not on duty). It is the taxpayer’s responsibility to attend to the place of work. CIR v Robert P Burns (1980) 1HKTC1181 – legal expenses incurred by a taxpayer in an appeal against disqualification was not allowed as the expenses were incurred in order to prevent the taxpayer from being precluded from earning income, not incurred in the production of the income. In D91/03, a solicitor was denied a deduction claim on professional indemnity insurance.The Board held that the amount was incurred so as to put the taxpayer in a position to earn her income and so as to qualify the taxpayer to perform the duties of her office as a solicitor. In D35/04, the taxpayer was required to repay part of the commissio n to his employer, being bad debt of his client. The repayment was required because he failed to observe the employer’s credit policy. The Board disallowed the sum as it was not incurred for the performance of duties but for deviation from his duties. Home loan interest deduction 1) mortgage loan to acquire dwelling in Hong Kong 2) interest paid to recognized organization 3) prescribed amount 4) claim for ten years In D5/02, a taxpayer held to be entitled to claim deduction of 50% only of he mortgage loan interest paid in respect of the property held by her and her mother as joint tenant although all mortgage payments were financed by her. In D106/00, it was held that only the portion of interest payment for the second bank loan used to repay the outstanding principal on the first bank loan is allowable. In D2/01, interest paid for the bank loan for the payment of the premium paid to the Housing Authority is not deductible as the premium was not deferred consideration for the acquisition of the dwelling house. In D108/02, it is considered that ‘owner’ does not include beneficial owner. SALARIES TAX PLANNING Common areas of salaries tax planning are source of employment, using statutory exemption and fringe benefit. Territorial source – EmploymentIf the following three factors are present, IRD will normally accept that employment is located outside Hong Kong: 1. the contract of employment was negotiated and entered into, and is enforceable outside Hong Kong; 2. the employer is resident outside Hong Kong; 3. the employee’s remuneration is paid to him outside Hong Kong. a) ensure foreign employment – only income attributable to Hong Kong services is taxable. Ensure all the above three factors are met. b) render all services outside Hong Kong or performed services during visits not exceeding 60 days in the year of assessment. c) dual employment – one covering Hong Kong duties with HK employer and the other covering o verseas services with overseas company.Ensure the nature of the employment duties is clearly differentiated. d) dual capacity as a director and an employee – not taxable if no services rendered in respect of the employment. Benefits-in-kind or Fringe Benefits Arranged to provide the following fringe benefits which are not taxable: 1. discharge of employer’s liability which is not guaranteed by any other person 2. benefits which are not convertible into cash 3. benefits which are not attributable to a particular employee Not convertible into cash The employer should not give an asset to an employee free or at a price below market value. Assets should be lent to the employee for use without transfer of ownership. Utilities of Employee’s HomeThe contracts should be made between the employer and the utilities suppliers for the supply of facilities to the employee’s home. Domestic Servant/driver The servant or driver should be employed by the employer to serve the employee. Low Interest loan or Interest free loan Such a loan provided by the employer is not taxable provided that no other person provides surety to the loan. The benefit must not be convertible into cash by the employee. Club The employer should become a member and allow its employee to enjoy the club’s facilities. Medical and Dental benefits 1. engage a doctor/dentist by the employer 2. join a group medical/dental insurance scheme Quarters 1. reimbursement of rent 2. provision of place of residenceShare option Only gain realized by the exercise of share options is taxable. So do not exercise the right unless you derive very little income from that transaction at that time. Comprehensive Double Taxation Arrangement On 21 August 2006, the Hong Kong Special Administrative Region (â€Å"Hong Kong†) and the Mainland of China (â€Å"Mainland China†) entered into a comprehensive double taxation arrangement known as â€Å"The Arrangement between the Mainland o f China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income† (the â€Å"Arrangement†). Salaries Tax ImplicationsGenerally speaking, income from employment by a Mainland resident shall be taxable only in Mainland China unless the employment is exercised in Hong Kong. If the employment is exercised in Hong Kong, such remuneration as is derived from Hong Kong may be chargeable to salaries tax in Hong Kong. A Mainland resident in respect of an employment exercised in Hong Kong will not be chargeable to salaries tax in Hong Kong if all the following three conditions are satisfied: 9 the recipient is present in Hong Kong for a period or periods not exceeding in the aggregate 183 days in any 12-month period commencing or ending in the taxable period concerned; 10 the remuneration is paid by, or on behalf of, an employer who is not a Hong Kong resident; c)the remuneration is no t borne by a permanent establishment which the employer has in Hong Kong. If a Mainland resident renders employment services in Hong Kong but his remuneration is paid by a Hong Kong employer, he will still be exempt from tax under the IRO if his visit to Hong Kong in a year of assessment concerned does not exceed a total of 60 days according to the â€Å"preferential treatment†. Section 50 of the IRO provides the basis for the granting of a tax credit in relation to an item of income stipulated in the Comprehensive Arrangement and in respect of which tax has been paid in the Mainland. Example of calculation in the Arrangement is extracted as follows: |$ | |Total Hong Kong assessable income |200,000 | |Including gross income from the Mainland before tax |120,000 | |Tax paid in the Mainland |10,000 | |Tax rate in the Mainland |8. 33% | |Net income after tax from the Mainland |110,000 | | | |The effective tax rate in HK and the tax credit are computed as follows: | | | | | Total HK assessable income |200,000 | |Less: Deductible items | (12,000) | |Net assessable income |188,000 | |Less: Personal allowance |(100,000) | |Net chargeable income |88,000 | | | | |Tax payable |6,340 | | | | |The effective tax rate in HK: Tax payable x 100% | | Net assessable income | | | = 6,340 x 100% | | | 188,000 | | | = 3. 7% | | | | | |Net income from the Mainland after tax | | | (grossed up at the effective rate in HK)(Note) | | | | | |$110,000 x 100% |113,836 | |(100% – 3. 37%) | | |Less: Net income from the Mainland after tax |(110,000) | |Tax credit limit of tax paid in the Mainland 3,836 | | | | |Under section 50, the actual tax payable in HK is computed as follows: | | | | |Assessable income (Hong Kong) |80,000 | | Assessable income (the Mainland) | | | after deduction of tax 110,000 | | | Add: tax deducted in the Mainland 10,000 | | |Gross income from the Mainland before tax |120,000 | |Total HK assessable income |200,000 | | Less: amount not allowed as a tax credit (10,000-3,836) | (6,164) | | |193,836 | | Less: Deductible items |(12,000) | | |181,836 | | Less: Personal allowance |(100,000) | |Net chargeable income |81,836 | | | | |Tax thereon |5,538 | |Less: tax credit allowed |(3,836) | |Hong Kong tax payable |1,702 | | | | |Note: | | |Under section 50(5), tax paid in the Mainland which is not allowed as a tax credit can be deducted from the income | |Amount not allowed as a ax credit $10,000 – $3,836 = $6,164 | |Net income from the Mainland after tax $120,000 – $6,164 = $113,836 | | | | | | | | | | | | | Lecture 1: Tutorial Questions 1. Mr Lee supplies you the following information in relation to the year ended 31 March 2012: ) He was recruited five years ago in Singapore by Multinet Ltd, a company incorporated and carried on business in Hong Kong, as the company’s regional manager. He was paid an annual salary of $800,000. During the year he only spent six months in Hong Kong as he was required to travel around Asia to carrying out his duties. By arrangement with his employer, his salary was paid directly into his bank account in Singapore from which he had money remitted periodically to Hong Kong. b) Multinet Ltd operates a medical insurance scheme for all its employees through an insurance company based in Hong Kong. Under this scheme Multinet, as insurer, arranges with the insurance company to insure each employee against illness and related hospital costs.It pays an annual premium to the insurance company of $6,000 for each employee. Mr Lee paid visits to his own doctors and paid the doctor’s bill first, which was later reimbursed by the insurance company. The insurance company reimbursed him the total cost of $7,500. c) He considered that it would be productive to have a personal laptop computer for use while traveling on business trips. He therefore purchased a computer for $12,000. He used it solely for his employment. d) Before he was employe d by Multinet, he was working with an international company incorporated in Singapore. All his services were rendered in Singapore. In March 2005, he was granted an option to subscribe for 100,000 hares at a cost of $2 per share. At the time of the grant, the market price was $5 per share. In January 2012, he exercised the option and the market price was $4 per share. In March 2012, he sold the shares for $6. e) Mrs Lee is a housewife and is living in Hong Kong. f) Multinet paid school fees amounting to $60,000 for the education of his younger son in Hong Kong. Under an arrangement entered between the school and Multinet, Mr Lee was not liable for the payment of the school fees. g) Mr Lee paid residential care expense of $60,000 to the residential care home situated in Kowloon Tong in respect of his father who is aged 64. He also paid $12,000 to his father. ) He has two children, aged 16 and 22. The younger son is the child as described in (f) above and the elder son is receiving fu ll time education in Singapore. He has a part-time job for his daily expenses. i) Mr Lee lives in a flat owned by himself and his wife as joint tenants. During the year they paid mortgage loan interest to the bank of $130,000. Required: a) Explain whether Mr Lee is liable to Hong Kong salaries tax. b) Assuming Mr Lee’s income is liable to Hong Kong tax, comment your tax treatment for items (b) to (i) above; and c) Compute Mr Lee’s salaries tax liability for the year of assessment 2011/12. Ignore provisional salaries tax. Note to students: distinguish between the HK employment and non-HK employment and apply the three factors to the case) 2. Mr Brown was employed by B Ltd as a sales manager for many years. B Ltd was incorporated and carrying on business in Singapore. Mr Brown used to live and perform duties in Singapore. In order to expand its market in China and South East Asia, he was assigned by B Ltd to work for two years from 1 April 2009 to 31 March 2011 to in cha rge of the sales activities of the company in that area, including Hong Kong, at an annual salary of $1,095,000. In consideration of his taking up the two years’ assignment, B Ltd would grant him a share option (Option 1) to purchase 100,000 shares in B Ltd at a price of $3 each upon completion of the assignment.On completion of the contract on 31 March 2011, B Ltd granted him the share option and he exercised the option on 30 June 2011. The share price per share of B Ltd was $5 and $8 as at 31 March 2011 and 30 June 2011 respectively. On 1 April 2011, Mr Brown signed another contract with B Ltd for another two years with annual salary of $1,171,200. In consideration of the taking up of a new contract, B Ltd unconditionally granted Mr Brown another option (Option 2) to purchase 150,000 shares in B Ltd at a price of $3. 50 each when the price per share was $5. 50. Mr Brown paid $10,000 for purchasing the option. On 1 October 2011, Mr Brown assigned the share option (Option 2) to his colleague for $330,000 when the price per share was $6.Starting from 1 April 2011, B Ltd rented a flat in Hong Kong at a monthly rent of $35,000 for Mr Brown’s residence and Mr Brown was required to pay monthly nominal rent of $1,500 to B Ltd. In the year of assessment 2011/12, Mr Brown took a 5-day business trip to Thailand to be followed by 5 days’ vacation there. Mr Brown’s wife accompanied him to take the 10-day trip to Thailand. B Ltd paid $50,000 for each of them to a travel company for the entire trip including air ticket, accommodation, meals, transportation expenses, etc. The cost of the air ticket was estimated to be $5,000 each. During the following years of assessment, Mr Brown’s stay in Hong Kong is as follows: Year of assessment No. of days in Hong Kong 2009/1055 2010/11280 011/12200 Required: a) Explain to Mr Brown whether his income is subject to salaries tax for the year of assessment 2009/10. b) Compute the assessable income of Mr Brown for the years of assessment 2010/11 and 2011/12. 3(a)Mr Fong is a financial manager of A Ltd, a company incorporated in Hong Kong, since December 2006. In April 2011, he was posted to Macau to set up the financial system of a subsidiary of A Ltd. His salary is directly deposited in his bank account in Hong Kong. He returns to Hong Kong regularly and stays with his friends, as he does not have a home in Hong Kong. In the year of assessment 2011/12, he spent 58 days in Hong Kong.During the period, he carried some of the work with him from Macau and worked in the office of A Ltd for a total of 50 days. Required: Comment on the salaries tax liability of Mr Fong for the year of assessment 2011/12. 3(b)Mr Kam was having a non-Hong Kong employment before 31 March 2010. On 10 April 2009, he was granted an option (Option A) unconditionally to purchase 80,000 shares of his employer’s holding company at a price of $2. 00 each when the price per share was $3. 50. During the year e nded 31 March 2010, he visited Hong Kong for 160 days for performing his employment duties. Starting from 1 April 2010, he was employed by C Ltd, a company incorporated and carrying on business in Hong Kong.He supplied you the following information for the year ended 31 March 2011: (a)Salary: $1,500,000 b) On 1 December 2010, he was granted an option to purchase 120,000 shares in C Ltd at a price of $1. 50 each when the price per share was $4. 25. He exercised the option on 20 March 2011 when the price per share was $5. 50. On 31 March 2011, he received dividend of $12,000 for the shares. c) Starting from 1 April 2010, he leased a flat at a monthly rent of $40,000 and C Ltd refunded monthly rent of $35,000 to him. d) Starting from 1 April 2010, C Ltd leased a motor car for the free use of Mr Kam. C Ltd paid monthly rental of $8,000 to the car leasing company. ) On 20 March 2011, he exercised Option A when the price per share was $3. 30. He sold the shares on 31 March 2011 when the p rice per share was $4. 80. f) He made cash donations to the Hong Kong Red Cross of $100,000. Mr Kam is married and his spouse is a housewife. They have a son aged 20 and is studying in a university in Singapore. Required: i) Explain your tax treatment of items (c) and (d) above. ii) Compute Mr Kam’s salaries tax liability for the year of assessment 2010/11. Ignore provisional salaries tax. 4. Mr Pang is a senior management of a company in Hong Kong. Due to the Board of Director’s decision, Mr Pang’s employment was terminated immediately on 29 June 2012.When Mr Pang left the company, he received a total sum of $3,960,000 consisting of the following: a) final month’s salary of $120,000; b) bonus of $100,000; c) payment in lieu of notice of $120,000; d) compensation for leave not taken of $60,000 e) lump sum payment of $1,000,000 agreeing for not participate with the company’s business for two years; f) a further sum of $2,560,000 being final settleme nt between the company and Mr Pang. According to the employment contract, the company is responsible for the traveling expenses for returning to Mr Pang’s home country. In this regard, the company had incurred cost of air tickets of $80,000 for Mr Pang’s return to his home country with his spouse.Required: Advise the tax treatment of the above items. (Note to students: you have to consider what additional information you may require to determine if the income is taxable or not) 5(a). Mr Chan owns Property A and Ms Lee owns Property B. Mr Chan married Ms Lee on 1 September 2010. Before their marriage, Mr Chan and Ms Lee lived at their own property. After marriage, Ms Lee moved into Mr Chan’s property. Ms Lee’s property was still used by her parents as their residence. Mr Chan and Ms Lee paid the following home loan interest during the year ended 31 March 2011: 1. 4. 2010 – 31. 8. 20101. 9. 2010 – 31. 3. 2011 Mr Chan$60,000$84,000Ms Lee$65,000 $30,000 5(b). Mr and Mrs Ko lived together in their jointly owned residence up to 31 December 2010. On 1 January 2011, they separated and Mr Ko moved out to a rental accommodation. Under the Deed of Separation, Mr Ko would assign the property to Mrs Ko at the date of divorce. The date of divorce was 1 July 2011 and the legal ownership of the property was assigned to Mrs Ko on that day. They paid the following home loan interest during the year ended 31 March 2011: 1. 4. 2010 – 31. 12. 2010$90,000 1. 1. 2011 – 31. 3. 2011$30,000 Mrs Ko was responsible for the payment of loan interest during the period from 1. 1. 2011 – 31. 3. 2011. 5(c).On 1 March 2010, Mr Ma purchased Property D at cost of $4,000,000 with downpayment of $1,200,000 and the balance was paid with the finance of mortgage loan obtained from a local bank and secured by Property D. The downpayment was financed by a bank’s overdraft, which was secured by his personal guarantee. He used Property D as his residence starting from 1 April 2010. During the year ended 31 March 2011, he paid the following interest to the bank: Bank overdraft interest: $60,000 Mortgage loan interest:$56,000 Required: Compute the amount of home loan interest that each of the above person was entitled to claim for the year of assessment 2010/11.You are required to state the principles/reasons to support your calculation. [Note to students: refers to DIPN No. 35(Revised)] 6. Mr Chung is going to renew a contract of employment with his employer. The company’s director has provided him with the following proposed changes: | |Current benefits |Proposed benefits | |(a) |13 months salary per annum |12 months salary per annum plus discretionary bonus, | | | |depending on the company’s profitability and the | | | |employee’s erformance | |(b) |Company car (the car is owned by the company) |A monthly sum of $12,000 will be paid to him for his | | | |transportation | |(c) |Meal coupons from canteen |Cancelled, business meals to be reimbursed upon | | | |approval | |(d) |Medical insurance (the company participated with a |Cancelled, medical bills to be reimbursed upon | | |scheme for the employees) |approval, up to a maximum of 80% of the bill amount | |(e) |Monthly housing allowance of $20,000 |Cancelled, rental reimbursement of $15,000 upon | | | |production of rental receipts and tenancy agreement | |(f) | – |Share option for employees to acquire shares in the | | | |employer’s listed holding company | |(g) |Children’s education cash allowance, paid by the |Cancelled, a one-off lump sum compensation payment to| | |company directly to the school |be made at the commencement of the new contract | Required: Advise Mr Chung on the Hong Kong salaries tax implications arising from the proposed changes to the respective benefit items. (Note to students: comments on whether such changes will affect the tax liability)