If taxpayer receives enquiry letters from the Inland Revenue Department, it is generally because the Inland Revenue Department has doubts regarding the tax returns, such as whether the allowances or expense deductions claimed fulfill the eligibility criteria.

 

If the taxpayer has been keeping up with the news, they would know that filing incorrect tax returns not only result in a fine from the Inland Revenue Department, but in some cases, taxpayers may also be sentenced to perform community service or even face imprisonment.  Hence, taxpayers should respond to the enquiry letters seriously.

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Here are some common matters the Inland Revenue Department may inquire about:

• Self-education expenses / approved charitable donations: The Inland Revenue Department requires supporting documents.

• Home loan interest: Has there been any refinancing or additional mortgages?

• Additional dependent parent allowance: Did you live with your parents for whole year?

• Rental income and rental agreement terms: The rental income reported is less than the rental agreement?

• Interest paid to earn rental income from properties

• Sub-contracting fee / service fee / commission expenses / consultancy fee

• Business entertainment expenses: Were the expenses incurred for the purpose of generating business income?

Here are some suggestions for responding to the enquiry letters issued by the Inland Revenue Department:

• Read the letter content carefully: Understand the information the Inland Revenue Department is enquiring about and what documents are required. Common enquiries are related to the additional dependent parent allowance, self education expenses and approved charitable donations etc.

• Provide relevant supporting documents: relevant receipts, address proofs, etc.

• Respond on time: The Inland Revenue Department generally sets a one-month deadline for replying the enquiry letters.  If the taxpayer requires additional time, they should apply for an extension early.

• Seek professional tax advice: Consult Chartered Tax Adviser for assistance to avoid the situation from worsening.

  

If you receive a letter from the Inland Revenue Department, the file number on the upper left corner is 4A, 4B, 4C, meaning that you are unfortunately being tax investigation conducted by the Inland Revenue Department.  The severity will be more than receiving enquiry letters from the Inland Revenue Department.  For further details regarding the tax investigation, please visit the tax investigation website.

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For further information, please contact 展群CK ® (Handled by CTA and FCPA):
a. Phone at (852) 3502 7392
b. Whatsapp at (852) 5227 9242
c. Email at info@ck-tax.com

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