Fringe benefits & benefits-in-kind ▸ Household expenses ▸ All contracts of household expenses e.g. utilities, domestic helpers are entered into by the employer (i.e. liabilities are borne by the employer) ▸ For the same amount of dispensable income of an individual, salaries tax is saved with a reduced income and elimination of expenses. 51 Fringe benefits & benefits-in-kind ▸ Illustration Before arrangement Income Household expenses Net dispensable income $ Tax treatment 500,000 Taxable (240,000) Non-deductible 260,000 After arrangement Income Household expenses Net dispensable income $ Tax treatment 260,000 Taxable 260,000 52

CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter4: Income Exclusions
Section: Chapter Questions
Problem 17DQ
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It is abuot hong kong tax planning, can you please explain what the two slides are explaing? 

Fringe benefits & benefits-in-kind
▸ Household expenses
▸ All contracts of household expenses e.g. utilities,
domestic helpers are entered into by the employer (i.e.
liabilities are borne by the employer)
▸ For the same amount of dispensable income of an
individual, salaries tax is saved with a reduced income
and elimination of expenses.
51
Transcribed Image Text:Fringe benefits & benefits-in-kind ▸ Household expenses ▸ All contracts of household expenses e.g. utilities, domestic helpers are entered into by the employer (i.e. liabilities are borne by the employer) ▸ For the same amount of dispensable income of an individual, salaries tax is saved with a reduced income and elimination of expenses. 51
Fringe benefits & benefits-in-kind
▸ Illustration
Before arrangement
Income
Household expenses
Net dispensable income
$ Tax treatment
500,000 Taxable
(240,000) Non-deductible
260,000
After arrangement
Income
Household expenses
Net dispensable income
$ Tax treatment
260,000 Taxable
260,000
52
Transcribed Image Text:Fringe benefits & benefits-in-kind ▸ Illustration Before arrangement Income Household expenses Net dispensable income $ Tax treatment 500,000 Taxable (240,000) Non-deductible 260,000 After arrangement Income Household expenses Net dispensable income $ Tax treatment 260,000 Taxable 260,000 52
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