MODULE 14: TAXATION

HKICPA PROFICIENCY LEVELS AND TAXONOMY

The proficiency level indicated in the table below reflects the level at which the topics covered in each particular learning outcome are tested.
There are three levels of proficiency:
 Level 1 is the foundational level, covering the skills of knowledge and comprehension.
 Level 2 is the intermediate level, covering the skills of application and analysis.
 Level 3 is the advanced level, covering the skills of integration and evaluation

You are expected to understand which skill is exercised based on the taxonomy verbs with which it is associated.
Please note that the list of taxonomy verbs below is for reference only and does not represent an exhaustive list.

Level 1: Foundation Level 2: Intermediate Level 3: Advanced

The remembering of previously learned Using new knowledge. Solve problems to Compile information together in a different
material (recall of facts) new situations by applying acquired way by combining elements in a new pattern
knowledge, facts, techniques and rules in a or proposing alternative solutions
different way
Comprehension Analysis Evaluation

Demonstrative understanding of facts and Examine and break information into parts by The ability to judge the value of material for a
ideas by organising, comparing, translating, identifying motives or causes. Make given purpose
interpreting, giving descriptions and stating inferences and find evidence to support
main ideas generalisation
The syllabus weighting table indicates the relative weightings of the syllabus areas encompassed in this module. It serves as a guide to the
percentage of study time spent on each syllabus area. In the long run, the marks allocation in the module examinations would conform to the
weightings as shown above. The exact range of marks allocation in each module examination may deviate from the weightings for suitably
robust questions to be set.

SYLLABUS AREA
Principal Learning Outcomes Supporting Learning Outcomes Proficiency Level
Demonstrate an understanding of the tax system and State, describe and apply the following key aspects of the tax system in
administration in Hong Kong Hong Kong:
Principles of taxation 2
Types of tax 1
Sources of Hong Kong tax law – statute, case law, Board 1
of Review decisions
Interpretation of tax statutes 1
The Basic Law 1
Departmental Interpretation and Practice Notes and 1
Stamp Office Interpretation and Practice Notes
Structure and administration of the Inland Revenue 1
Department
Duties and powers of officers of the Inland Revenue 1
Department, and official secrecy
Obligations and liabilities of a taxpayer, his agent, a 1
trustee or an executor
SYLLABUS AREA
Principal Learning Outcomes Supporting Learning Outcomes Proficiency Level
Demonstrate an understanding of the tax system and State, describe and apply the following key aspects of the tax system in
administration in Hong Kong (Cont'd) Hong Kong:
Returns, offences and penalties 2
Assessments, additional assessments and provisional 2
assessments
Payment, recovery, holding over and refund of tax 1
Objections, appeals and claims 2
Board of Review 1
Board of Inland Revenue 2
Field audit and investigation 2
Apply tax rules and principles and calculate tax liabilities Describe, explain and analyse the following tax issues as they impact and
for property tax, salaries tax, profits tax, personal interact on transactions, individuals and entities:
assessment and stamp duty in Hong Kong Property tax
Scope of property tax charge 2
Chargeable property and owners of land and/or buildings 2
Salaries tax
Scope of salaries tax charge 2
Time basis assessment 2
Incomes 2
SYLLABUS AREA
Principal Learning Outcomes Supporting Learning Outcomes Proficiency Level
Apply tax rules and principles and calculate tax liabilities Describe, explain and analyse the following tax issues as they impact and
for property tax, salaries tax, profits tax, personal interact on transactions, individuals and entities:
assessment and stamp duty in Hong Kong (Cont'd) Salaries tax
Benefits in kind, housing benefits, share-based benefits 2
and holiday journey benefits
Lump sum receipts 2
Expenses and deductions 2
Losses 2
Personal allowances 2
Separate taxation on spouses and joint assessment 2
Profits tax
Scope of profits tax charge 2
Badges of trade 2
Source of profits 2
Deemed trading receipts 2
Distinction between capital and revenue items 2
General deductions and specific deductions 2
Cessation and post-cessation receipts and payments 2
Sharkey v Wernher principle 2
Stock borrowing and lending transactions 2
SYLLABUS AREA
Principal Learning Outcomes Supporting Learning Outcomes Proficiency Level
Apply tax rules and principles and calculate tax liabilities Describe, explain and analyse the following tax issues as they impact and
for property tax, salaries tax, profits tax, personal interact on transactions, individuals and entities:
assessment and stamp duty in Hong Kong (Cont'd) Profits tax
Financial instruments and foreign exchange differences 2
Exemption for offshore funds 2
Alternative bond schemes 2
Special classes of business 1
Partnerships, joint ventures, and allocation of profit/loss 2
Losses 2
Depreciation allowances: plant and machinery 2
Depreciation allowances: industrial buildings and 2
commercial buildings
Personal assessment
Election of personal assessment 2
Stamp duty
Scope of stamp duty charge 1
Conveyance on sale of immovable property 2
Agreement for sale of immovable property 2
SYLLABUS AREA
Principal Learning Outcomes Supporting Learning Outcomes Proficiency Level
Apply tax rules and principles and calculate tax liabilities Describe, explain and analyse the following tax issues as they impact and
for property tax, salaries tax, profits tax, personal interact on transactions, individuals and entities:
assessment and stamp duty in Hong Kong (Cont'd) Stamp duty
Lease of immovable property 2
Hong Kong stock 2
Hong Kong bearer instrument, duplicate and counterpart 2
Voluntary disposition inter vivos 2
Alternative bond schemes 2
Exemptions and reliefs 2
Adjudication, assessment and administration 1
Calculate the following tax liabilities for transactions, individuals and entities:
Property tax
Ascertainment of property tax liability 2
Salaries tax
Ascertainment of salaries tax liability 2
Profits tax
Ascertainment of profits tax liability 2
Personal assessment
Ascertainment of tax liability under personal assessment 2
SYLLABUS AREA
Principal Learning Outcomes Supporting Learning Outcomes Proficiency Level
Apply tax rules and principles and calculate tax liabilities Calculate the following tax liabilities for transactions, individuals and entities:
for property tax, salaries tax, profits tax, personal Stamp duty
assessment and stamp duty in Hong Kong (Cont'd) Ascertainment of stamp duty liability 2
Apply profits tax rules and principles and calculate Explain and analyse the tax implications and calculate the 2
profits tax liabilities for cross-border transactions tax liabilities for cross-border transactions
Demonstrate an understanding of the tax system and Describe and apply the key aspects of the tax system in 2
administration in Mainland China Mainland China
Advise on Hong Kong tax planning ideas and strategies Explain, apply and consider the anti-avoidance provisions 3
to enhance tax efficiency in the Inland Revenue Ordinance
Explain and apply the Ramsay principle 2
Explain and apply the provisions on offences and 2
penalties
Explain and apply the advance ruling system 2
Advise on Hong Kong tax planning opportunities 3
Advise on transfer pricing 3
Explain and advise on the use of double taxation 3
agreements/arrangements ("DTAs") for tax planning
Advise on the professional, ethical and legal 3
considerations in relation to tax compliance engagements
and tax planning