THE CHINESE UNIVERSITY OF HONG KONG
School of Accountancy
ACCT 4261
Taxes and Business Strategy
(1st Term, 2015-16)
INSTRUCTOR
Name:
Office
Telephone:
Email:
Office hour:
Dr Shirley Kan
Room 1038, 10/F, Cheng Yu Tung Building
3943 8557
skan@cuhk.edu.hk
Tuesday 5:30 p.m. – 6:30 p.m.
TEACHING ASSISTANT
Name:
Office:
Telephone:
Email:
Ms Ida Tsang
Room 1049, 10/F, Cheng Yu Tung Building
3943 7644
adatsang@baf.cuhk.edu.hk
COURSE OBJECTIVE
The objective of the course is to provide a framework that is useful for thinking about how taxes affect
business activities. The focus is the impact of taxes on investment strategies and financing policies. It also
considers the tax consequences of compensation alternatives to both the employer and the employee. Prerequisite: ACCT 3161
LEARNING OUTCOMES
After completing this course, students will be able to:
1.
2.
3.
4.
5.
6.
7.
8.
Acquire an advanced knowledge of taxation in Hong Kong.
Demonstrate an awareness of the current issues and developments in the Hong Kong taxation system.
Explain and apply the rules and tax cases for determining the source of profits.
Determine the basis period and apply the loss reliefs for profits tax purposes.
Explain and apply the tax principles for determining the profits tax liabilities of partnerships, special
classes of business and non-residents.
Understand the common tax issues in mergers and acquisitions and tax due diligence.
Explain tax evasion and tax avoidance, tax investigation, offences and penalties; and apply the antiavoidance rules.
Evaluate the impact of taxation on business decision making and tax planning arrangements.
COURSE ASSESSMENT
Task nature
Case assignment and participation
Test
Weight
30%
70%
100%
8 Dec 2015 (Tuesday), 2:30 – 5:30 p.m., WMY303
The test is a 3-hour open book, open notes test.
1
LEARNING ACTIVITES
Lecture (including inclass discussion /
presentation) (hr)
in / out class
3
0
Lab / tutorial
(hr)
in / out class
0
Project / Case discussion
(hr)
in / out class
0
0
2
Expected out-of-class
activities (hrs)
in / out class
0
6
1. Lectures
In-class examples/problems will be provided to illustrate the application of knowledge and techniques.
Students are encouraged to raise questions, participate in class discussions and share ideas with their
classmates.
2. Self-study
The minimum required outside-class study time is six hours per week. Students are encouraged to work
on the practice questions.
3. Case Assignment
Students will be given assignment(s) consisting of case problems and report writing. Students are required
to analyse and solve tax problems in a business context.
LIST OF TOPICS
1.
2.
3.
4.
5.
6.
7.
8.
9.
Locality of profits: case law and practice
Profits tax: basis period
Profits tax: partnership and loss relief
Taxation of non-residents and overseas activities
Taxation of special classes of business
Tax issues in mergers and acquisitions and tax due diligence
Tax evasion and avoidance, tax investigation, anti-tax avoidance rules, offences and penalties
Tax planning
Current issues and developments in the Hong Kong taxation system
COURSE SCHEDULE
Date
11 Sep
18 Sep
25 Sep
2 Oct
9 Oct
16 Oct
23 Oct
30 Oct
6 Nov
13 Nov
20 Nov
27 Nov
4 Dec
8 Dec (Tue)
Topic
Introduction and profits tax: source of profits
Profits tax: source of profits
Profits tax: basis period
Profits tax: partnership and loss relief
Profits tax: non-residents and overseas activities
Profits tax: non-residents and overseas activities
Profits tax: mergers and acquisitions and tax due diligence
Profits tax: transfer pricing
Tax avoidance and tax investigation
Anti-avoidance rules, offences and penalties
Tax planning and ethics
Profits tax: special classes of business
Current issues and developments in the HK taxation system
Test (3-hour, open book and open notes)
2
Reading
Ch. 4, DIPN 21 & 39
Ch. 4, DIPN 21 & 39
Ch. 4, advance ruling cases
Ch. 4, DIPN 8
Ch. 4, 11, DIPN 17, 28, 30, 43
Ch. 4, 11
Ch. 4, 10, 11, DIPN 45, 46, 48
Ch. 10, DIPN 11
Ch. 4, 7, 10, DIPN 15, 24, 25
Ch. 2 – 4, 10, 11, DIPN 31
Ch. 4, DIPN 42
Ch. 11, DIPN 47, 48
LEARNING RESOURCES FOR STUDENTS
Prescribed Texts
1. A. Macpherson & G. Laird, “Hong Kong Taxation: Law and Practice”, 2015-16 edition, The Chinese
University Press.
2. Inland Revenue Ordinance, Chapter 112, The Government Printer.
3. Inland Revenue Rules, The Government Printer.
Reference Materials
4.
5.
6.
7.
8.
9.
10.
11.
Hong Kong Tax Cases, The Government Printer.
Board of Review Decisions, The Government Printer.
Departmental Interpretation & Practice Notes, Inland Revenue Department.
Dora Lee, “Advanced Taxation in Hong Kong”, 17th edition, Longman.
Patrick Ho, Tax Planning (Hong Kong), 14th edition, Pilot Publishing Co Ltd.
Hong Kong Master Tax Guide, 2015/16 edition, CCH International.
http://www.ird.gov.hk/index.htm
www.accaglobal.com/gb/en/student/acca-qual-student-journey/qual-resource/accaqualification/p6/past-exam-papers/hong-kong.html
Preparing for Classes
Come to class. Examinations will reflect what have been discussed. Class discussions are strongly
encouraged. Students will learn more by participating in and listening to the discussions. Students’ attendance,
quality of contribution, attentive listening, courtesy and effort will add value to the class.
Students are expected to have read the reading materials prior to class. Students are also expected to have
reviewed class examples as assigned. Coming to class prepared greatly facilitates the learning process. If all
students come to the class prepared, the learning experience would be both pleasant and rewarding.
FEEDBACK FOR EVALUATION
Students are warmly welcomed to send their comments/feedback to the course instructor. The channels include:
(1) e-mails to the instructor; (2) appointment with the instructor; and (3) formal CTE exercise.
COURSE ANNOUNCEMENTS
A course website has been set up in the eLearning platform. All major course announcements will be made
during lectures and/or through the eLearning platform and e-mails. Please check the eLearning platform and
your CUHK e-mail account frequently.
ACADEMIC HONESTY AND PLAGIARISM
Academic honesty is the cornerstone in the development of knowledge. The Chinese University of Hong
Kong places very high importance on honesty in academic work submitted by students, and adopts a policy of
zero tolerance on cheating and plagiarism. A single offense of plagiarism or cheating on assignments, midterm and final examinations, etc., will lead to disciplinary actions including termination of studies. Attention
is drawn to University policy and regulations on honesty in academic work, and to the disciplinary guidelines
and procedures applicable to breaches of such policy and regulations. For further details, please refer to the
Student Handbook 2015-16 and http://www.cuhk.edu.hk/policy/academichonesty/ for details. With each
assignment, you are required to submit a statement to the effect that you are aware of these policies,
regulations, guidelines and procedures.
3