Employee Master, Inland Revenue tab

Inland Revenue Tab is under Master ⇒ Employee Master.

The Inland Revenue tab is for taxation module to use in IR56B, IR56E, IR56F, IR56G and IR56M etc.  You need to fill in the extra information only when necessary.

Employer: This identifies the company employing the individual. It’s relevant for tax reporting, as the employer is responsible for submitting certain tax forms (like the IR56 series) to the IRD on behalf of the employee.

Hong Kong Income Tax Taxable: This checkbox indicates whether an employee's income is subject to Hong Kong income tax. When this option is selected, the system includes the relevant income in tax calculations and reporting, ensuring compliance with local tax regulations.

IR56E Printed: This status indicates whether the IR56E form has been generated for the employee. This status is automatically managed by the system. However, if you manually activate it, the system will not generate an IR56E form. This is typically done within 3 months of the employee starting work.

IR56F/G Printed: Similarly, the "IR56F/G Printed" status shows whether the IR56F/G forms have been generated for the employee. This status is also automatically handled by the system. If manually enabled, the system will not generate the IR56F/G forms.  This is usually required within one month of the event.

Particulars of Place of Residence Provided

Place of Residence provided: This indicates whether the employer has provided residential accommodation to the employee.

(a) Address 1

Address 1: This field is for entering the address of the first residential property provided to the employee by the employer. For example, if the employer provides a company apartment, the full address (e.g., "Flat 4A, Tower 1, Happy Gardens, Kowloon") would be entered here.

Nature: This field describes the type of accommodation provided. Examples include "Apartment," "House," "Serviced Apartment," or "Shared Accommodation." This helps the IRD understand the nature of the benefit for tax assessment purposes.

Period Provided: These fields specify the start and end dates during which the accommodation was provided to the employee. For example, "01/01/2024 to 31/12/2024." This is important because the taxable value of the accommodation is calculated based on the duration it was provided.

Monthly Rent Paid to Landlord by Employer: This field records the monthly rent amount (in HKD) that the employer pays to the landlord for the accommodation. For example, if the employer rents an apartment for the employee at HKD 20,000 per month, that amount is entered here. This is a key figure for calculating the taxable benefit to the employee.

Monthly Rent Paid to Landlord by Employee: This field records any portion of the rent that the employee pays directly to the landlord. For example, if the employee contributes HKD 5,000 of the HKD 20,000 rent, that amount is entered here. This reduces the taxable benefit value, as the employee is covering part of the cost.

Monthly Rent Refunded to Employee by Employer: This field is for cases where the employee initially pays the rent to the landlord, and the employer reimburses the employee for that amount. For example, if the employee pays HKD 10,000 and the employer refunds HKD 8,000, that HKD 8,000 is entered here. This amount is treated as a taxable benefit.

Monthly Rent Paid to Employee by Employer: This field is for situations where the employer directly pays a housing allowance to the employee (instead of paying the landlord). For example, if the employer gives the employee HKD 15,000 per month to cover rent, that amount is entered here. This is also a taxable benefit.

The amounts "Monthly Rent Paid to Landlord by Employer, Monthly Rent Paid to Landlord by Employee", "Monthly Rent Refunded to Employee", and "Monthly Rent Paid to Employer by Employee" are the monthly rent amount. Usually, the "Period Provided" is the contract period and the amount is the monthly contract amount. These monthly amounts will be multiplied by the taxation period covered in IR56B, IR56F, or IR56G. 

(b) Address 2

This section is identical to the "Address 1" section but is used if the employer provides a second place of residence for the employee (e.g., if the employee moves to a new company-provided residence during the tax year). The fields (Address, Nature, Period Provided, and the various rent fields) serve the same purpose as described above but for the second property.

Payment by a non-Hong Kong company

The "Payment by a non-Hong Kong company" section is typically used to capture details about an employee's income that is paid, either fully or partially, by a company located outside Hong Kong. Here's a breakdown of its components:

• Whether the employee was wholly or partly paid either in Hong Kong or elsewhere by a non-Hong Kong company: This indicates if the employee received any portion of their income from a non-Hong Kong entity, regardless of where the payment was made.

• Name of the non-Hong Kong company: Specify the name of the foreign company responsible for the payment.

• Address: Records the address of the non-Hong Kong company for identification and documentation purposes.

• Amount: Details the exact amount paid by the non-Hong Kong company to the employee.

• If part-time, the name of the principal employer: If the employee is working part-time, this field identifies their main employer.

• Remarks: Provides space for any additional notes or clarifications regarding the payment arrangement.

IR56E - Notification by an employer of an employee who commences to be employed

• Whether the employee has been conditionally granted a share option prior to commencing to be employed in Hong Kong, which can be exercised after rendering services in Hong Kong: This option refers to whether an employee has been offered a share option before they officially start working in Hong Kong. A conditional share option means that the right to exercise the share option is subject to certain conditions, such as the employee rendering services in Hong Kong after the employment begins. Employers must disclose this information because share options tied to service conditions in Hong Kong may have implications for salaries tax under Hong Kong's tax laws. If the share option is exercised after the employee has worked in Hong Kong, the income derived from the share option could be considered taxable.

IR56M - Notification of Remuneration Paid to Persons Other Than Employees

• Non-Employee for IR56M:  When this option is selected, it indicates that the individual is not an employee but rather falls into categories such as subcontractor, consultant, agent, brokerage, contributing artist, entertainer, athlete, writer, etc. This individual is required to submit the IR56M form but is not required to submit other forms like IR56E, IR56B, IR56F, or IR56G.

• Name of Company: The official name of the company paying the remuneration which is for a person other than an individual or a corporation.

• Name of Company (Chinese): The company's name in Chinese, if applicable.

• Business Registration No.: The business registration number of the company, ensuring its legal identification for taxation purposes.