Two company directors were convicted at the District Court of two charges of tax evasion on April 7, 2020, and were sentenced today (April 28). Both defendants were sentenced to six weeks' immediate imprisonment.

     The two directors, now aged 53 and 59 respectively, were previously acquitted of five charges of offences, being wilfully with intent to assist a company to evade profits tax. The Secretary for Justice appealed to the Court of Appeal against the Judge's verdict on two of the five charges. The Court of Appeal allowed the appeal and remitted the case to the District Court for retrial. The two relevant charges were wilfully with intent assisting a company to evade tax by making use of a fraud, art or contrivance or authorising the use of such fraud, art or contrivance, for the years of assessment 2005-06 and 2006-07, contrary to section 82(1)(g) of the Inland Revenue Ordinance (Cap. 112) (IRO).      

     The court heard that the two directors were the shareholders and directors of a property agency company. The total assessable profits reported by the said company for the two years 2005-06 and 2006-07 amounted to $253,425. An investigation by the Inland Revenue Department (IRD) revealed that the two directors included two bogus payments for the total sum of $199,000 as expenses of the said company, namely "computer and internet expenses" of $99,700 and "salaries and commission expenses" of $99,300, thereby reducing the company's assessable profits for the two years by a total amount of $199,000. The total tax evaded was $34,826.

     A spokesman for the IRD reminds 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.

Ends/Tuesday, April 28, 2020
Issued at HKT 18:58

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