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Ken is the financial controller of Tai Fuk Ltd
Ken is the financial controller of Tai Fuk Ltd. His job position requires him to be a member of a professional accounting body. Ken is both a member of ACCA and HKICPA. He paid annual subscriptions of $2,700 and $2,300 to ACCA and HKICPA respectively in the year of assessment 2020/21. The expense(s) he could deduct under salaries tax is/are:
Expert Solution
The expenses he could deduct under salaries tax are:
- The amount of $2,700 he had paid as annual subscription to the ACCA
- The amount of $2,300 he had paid as annual subscription to the HKICPA
Step-by-step explanation
Hello dear student!
Under Taxation Laws, any expense incurred by the taxpayer which is necessary for the taxpayer to exercise their professional is deductible from the salaries tax of the taxpayer. Here, Ken is required to be a member of a professional accounting body to be able to exercise his employment as a financial controller of Tai Fuk Ltd. thus his membership in both the ACCA & the HKICPA, which are both professional accounting bodies, is necessary for him to exercise his profession.
This considered, the amounts he paid to be a member of both the ACCA & the HKICPA is deductible on account of how it is a necessity for him to work as a financial controller, thus the expenses Ken can make to his salaries tax are:
- The amount of $2,700 he had paid as annual subscription to the ACCA
- The amount of $2,300 he had paid as annual subscription to the HKICPA
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