案例分析题

(a) Wonder Ltd is the subsidiary of a group with its parent company listed on the New York Stock Exchange. The human resources manager is not sure how to calculate the individual income tax (IIT) liability for each of the following persons:

(1) Mr Wang is an independent non-executive director who received a director’s fee of RMB40,000 in January 2018. He donated RMB1,800 of this to the China Red Cross.

(2) Ms Xie is the managing director and general manager of Wonder Ltd. She received salary of RMB80,000 and a director’s fee of RMB50,000 in January 2018.

(3) Mr Yao, the head of the marketing department, received a salary of RMB70,000 in January 2018 and an annual bonus of RMB1,000,000 due to his excellent work performance.

(4) Ms Zhang is the chief financial officer who joined the company in 2015. She was granted 10,000 share options in the company on 2 January 2018 when the market price was USD20 per share. The share option agreement allows Ms Zhang to exercise these options at USD1 per share. She exercised 3,000 share options on 28 January 2018 when the market price was USD19 per share. She sold 2,000 shares on 31 January 2018 when the market price was USD28 per share.

Required:

Calculate the individual income tax (IIT) liability for each of the above persons. Indicate by the use of zero (0) any transaction which is not taxable or tax exempt.

Note: Ignore value added tax (VAT) and surtaxes on VAT

(b) Ms Ma is a UK citizen. She started working in Beijing in January 2017. Her payslip for the month of December 2017 showed the following items:

                                                                                                                                              RMB

(1) Monthly salary                                                                                                                  90,000

(2) Rental allowance in cash                                                                                                   10,000

(3) Reimbursement of air-tickets on business trips                                                                6,000

(4) Reimbursement of air-tickets on the third home leave in 2017                                       4,100

(5) Reimbursement of costs for Ms Ma to learn Putonghua in China                                    5,500

(6) Reimbursement of piano tuition fees in China for Ms Ma’s children                             2,400

(7) Laundry allowance on reimbursement basis                                                                       480

(8) Reimbursement of car rental for private use                                                                       6,700

(9) Employer’s contribution on social security                                                                        5,800

(10) Employee’s contributions on social security                                                                    3,200

Required:

Calculate the individual income tax (IIT) payable by Ms Ma on the above items (1) to (10) for December 2017. Indicate by the use of zero (0) any item which is tax exempt or not taxable.