Hong Kong Metes Out Longest Sentence For Tax Evasion

by Mary Swire, Tax-News.com, Hong Kong

05 July 2007

Company director Yeung Kwong-kei has been jailed for two years by the Hong Kong District Court for evading profits tax, the longest jail term ever imposed for tax evasion in the territory.

The 46-year-old was the shareholder and director of Hang Hing Computer Label. The company issued two types of sales invoices, one computer-generated and issued in the company's name, and the other handwritten and issued in name of a sole-proprietary business formerly operated by the defendant. The sole-proprietary business ceased operation in 1994.

For the 1997-98 to 2000-2001 years of assessment, the company omitted from its profits tax returns proceeds of sales in respect of all those handwritten invoices. The total amount of sales omitted was HK$3,171,040 (US$406,000).

The defendant also used false invoices to claim purchases and other expenses in the company's accounts, thereby reducing its assessable profits. The total amount of expenses falsely claimed was HK$2,782,580.

The total amount of profits understated was HK$5,953,620, and the total tax evaded was HK$961,978.

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