7th January 2025 – (Hong Kong) The Court of First Instance of the High Court has today rejected an appeal filed by an insurance agent challenging her conviction for tax evasion.
The appellant, a sole proprietress running an insurance agency, was found guilty in July 2022 at the West Kowloon Magistrates’ Courts on 11 counts of deliberately evading taxes by submitting fraudulent tax and employer’s returns, in violation of section 82(1)(d) of the Inland Revenue Ordinance (IRO) (Cap.112). She received a nine-month prison sentence.
During the assessment years 2009-10 to 2011-12, the appellant claimed deductions for “office assistants” expenses in her profit and loss accounts, falsely reporting two employees earning $96,000 each annually. However, an investigation by the Inland Revenue Department (IRD) determined that these individuals neither worked for her nor received any payment. The fabricated “office assistants” expenses totalled $192,000, which reduced her assessable profits by $576,000, leading to a tax shortfall of $75,033.
Additionally, the appellant falsely declared that her father lived with her throughout the entirety of the assessment years 2008-09 and 2013-14 to 2016-17, claiming an extra dependent parent allowance of $194,000, which resulted in a further tax evasion of $11,816. In total, her false claims over the eight assessment years amounted to $770,000, with a total tax evaded of $86,849.
A spokesperson for the IRD emphasised that tax evasion is a serious criminal offence under the IRO, carrying a maximum penalty of three years’ imprisonment and a fine of $50,000 for each charge, alongside an additional fine equating to three times the evaded tax amount.
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