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These notes are issued for the information of taxpayers and their tax - page 56 / 68

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56 / 68

The first

$30,000

x

2%

The second

$30,000

x

7%

The remaining

$28,000

x

13%

$88,000

Tax payable on:

= 3.37%

The effective tax rate in Hong Kong =

Tax payable Net assessable income

=

6,340 x 100% 188,000

600 2,100 3,640 6,340

x 100%

Net income from the Mainland after tax (grossed up at the effective tax rate in Hong Kong)

(Note 1)

$

$110,000 x

100% (100% – 3.37%)

113,836

Less: Net income from the Mainland after tax Tax credit limit for tax paid in the Mainland

(110,000) 3,836

Under section 50(5), the actual tax payable in Hong Kong is computed as follows:

$

Assessable income (Hong Kong) Assessable income (the Mainland) after deduction of tax Add: tax deducted in the Mainland Gross income from the Mainland before tax Total Hong Kong assessable income Less: amount not allowed as a tax credit 110,000 10,000 (Note 1)

Less: Deductible items

Less: Personal allowance Net chargeable income

$ 80,000

120,000 200,000 (6,164) 193,836 (12,000) 181,836 (100,000) 81,836

52

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