The Asia-Pacific Journal of Taxation (APJT) is a joint effort between the Taxation Institute of Hong Kong and the School of Accounting and Finance of The Hong Kong Polytechnic University.

It publishes research papers, commentary notes, book reviews and articles that address significant issues in the field of taxation relevant to Hong Kong, China and the Asian Pacific region.

The APJT aims to provide quality service to the readership by making its content ore informative and thorough, and by striking a proper balance between professionalism and intellectual stimulation.

The APJT normally publishes two issues every year.

Feature Articles

PRC & International Technical Column(s)
Volume 24, Number 1
Mainland China Issued Individual Income Tax Related Policies to Improve Talent Mobility in the Greater Bay Area
HK Technical Column(s)
Volume 24, Number 1
A Review of Recent Board of Review Cases (July 2020)


Joint Editors

Jody Wong
The Hong Kong Polytechnic University
Percy Wong
The Hong Kong Polytechnic University
Philip Hung
The Taxation Institute of Hong Kong
Jeremy Choi
The Taxation Institute of Hong Kong
Anita Tsang
The Taxation Institute of Hong Kong

Editorial Consultants

Agnes Cheng
The Hong Kong Polytechnic University
Nigel Eastaway
MHA MacIntyre Hudson
Michael Olesnicky
Baker & McKenzie, HK
Charles Swenson
University of Southern California, USA
Daniel Thornton
Queen's University, Canada
Jefferson VanderWolk
Squire Patton Boggs, USA
Marcellus Wong
AMTD Group

Editorial Board Members

Brian Andrew
University of Wollongong
Wilson Cheng
Ernst & Young Tax Services Limited
Cheng Chi
KPMG, China
Sarah Chin
Deloitte Touche Tohmatsu, HK
Jeremy Choi
PricewaterhouseCoopers, HK
Spencer Chong
PricewaterhouseCoopers, HK
Wilson Chow
The University of Hong Kong
Daniel Ho
Hong Kong Baptist University
Patrick Ho
FTMS Training System Limited
Betty Kwok
The Hang Seng University of Hong Kong
Simon James
University of Exeter
Jeyapalan Kasipillai
Monash University Malaysia
Patrick Kwong
Ernst & Young Tax Services Limited
Stephen Lee
Sinotax Services Limited
Thomas Lee
Thomas Lee & Partners
Tak Yan Leung
Open University of Hong Kong
Aldous Mak
Hong Kong Institute of Vocational Education (Haking Wong)
Kelvin Mak
Hong Kong University of Science and Technology
Poh Eng Hin
Nanyang Technology University
Anthony Tam
Fergus Wong
PricewaterhouseCoopers, HK
Chris Xing
KPMG, China
Kalloe Vinod
KPMG, Netherlands

Letters From The Editors

Global economic activities have been significantly impacted in the first half of 2020 by COVID-19. In Hong Kong, the issuance of tax returns for 2019/20 was postponed until June. To help some taxpayers (including individuals and companies) experiencing financial difficulties, the Hong Kong Government announced a relief measure on tax payments on 4 December 2019: For instalment plans approved by the Inland Revenue Department (IRD) to allow taxpayers encountering financial difficulties to settle their salaries tax, profits tax and personal assessment demand notes issued between December 2019 and December 2020 for the year of assessment 2018/19, no surcharge will be imposed for a maximum period of one year. To ease the financial burden and cash flow of businesses and individuals, on 8 April, the Chief Executive announced a series of relief measures (“Relief Measures”), including the automatic extension of deadlines by three months for the payment of salaries tax, tax under personal assessment, and profits tax for the year of assessment 2018/19 that would have been due in April to June this year. No application by taxpayers is required for the relief. Under the Relief Measures, certain financial assistance and subsidies will be granted to eligible persons and businesses. These subsidies and financial assistance will be exempt from tax under the Exemption from Salaries Tax and Profits Tax (Anti-epidemic Fund) Order (“the Exemption Order”) which came into effective on 29 May 2020. Subject to the fulfilment of certain requirements, the Exemption Order exempts individuals and businesses from salaries tax and profits tax in respect of financial assistance or relief provided under the Anti-epidemic Fund (“AEF”) for the year of assessment commencing on 1 April 2019 and for all subsequent years of assessment. Compared with the above measures, the 100 per cent tax reduction (capped at $20,000) for the year 2019/20 proposed by the Financial Secretary in his 2020/21 Budget seems less significant.

It is pleasing to see that the work of the Hong Kong tax administration has not been affected much by the COVID-19 pandemic. It seems that the IRD has stepped up its efforts in writing Departmental Practice and Interpretation Notes (“DIPNs”) during the first six months of 2020, issuing eight DIPNs during this period. February was the most productive month: six DIPNs were issued, including DIPN 18 – Assessment of Individuals under Salaries Tax and Personal Assessment and five DIPNs related to concessionary deductions—DIPNs 35 (revised), 36 (revised), 37 (revised), 56, and 57 in respect of home loan interest, elderly residential care expenses, approved charitable donations, health insurance premiums and annuity premiums, and MPF voluntary contributions, respectively. In March, the long awaited DIPN 39 Profits Tax – Digital Economy, Electronic Commerce and Digital Assets was issued, and in April, DIPN 31 (revised) – Advance Rulings was released. In addition to the DIPNs, on 25 November 2019, Hong Kong and Macao signed a comprehensive double taxation arrangement. The Chief Executive in Council has made an order to implement the arrangement, which will enter into force after both sides have completed the ratification procedures. The arrangement is the 43rd comprehensive avoidance of double taxation agreement/arrangement signed by Hong Kong.

On the international front, it seems that compared with last year, there have not been as many changes in the first six months of 2020. Nevertheless, three updates should be noted. In April, the Organisation for Economic Co-operation and Development (“OECD”) published an analysis entitled “OECD Secretariat Analysis of Tax Treaties and Impact of the COVID-19 Crisis”, which provides guidance on the cross-border tax issues arising from the COVID-19 situation, particularly whether working from home constitutes a permanent establishment. In February, the International Tax Authority of the British Virgin Islands issued an updated version of “Rules on Economic Substance in Virgin Islands”. Finally, in May, the Ministry of Finance of the Cayman Islands uploaded two sample forms to be filed for economic substance purposes onto its website for the public’s information.

This issue of the APJT contains a variety of articles contributed by authors from Hong Kong and overseas. In the Hong Kong Technical column, there is a review of recent Board of Review cases. In the PRC & International column, there are three articles: one discussing the individual income tax policies to enhance talent mobility in the Greater Bay area, one examining how BEPS 2.0 is reshaping the international taxation landscape, and one using quantitative analysis to explore the internal enablers of workforce agility in the tax consulting services of the Big 4. The article in the Belt and Road column provides an overview of the tax rules on capital gains in Fiji. The Budget column contains our Institute’s budget proposal and commentary for 2020/21. We have also received one letter to the editors commenting that the Legal Aid Scheme should be widened to cover tax litigation.

We would like to express our heartfelt thanks to the authors for contributing these insightful articles. Our special thanks go to the reviewers for their valuable comments. Last but not least, we wish to thank our readers for their continued support. We hope you will enjoy reading the Journal. We welcome any comments and suggestions to improve its content and quality. If you wish to voice your views and suggestions on any tax matters, be they policy issues or practical matters, you are welcome to submit a letter to the editors.

The Joint Editors

July 2020