|Inland Revenue Ordinance made simple
Any payment made by an employer to a person after that
person has ceased employment shall be deemed to be accrued to that person on
the last day of employment.
The above section is to make it absolutely clear that
salaries or wages received after employment is taxable. If not for this
section, some employees receiving salaries after termination of employment
might have argued that such salaries were not taxable as he was no longer an
employee. Had that argument stood, a loophole might have arisen in the law
so that some wages might be arranged to be paid after the employment period
to escape tax. Now, with the clear provision in the law, such post
employment income is deemed to be received on the last day of employment and
taxable as such, and so, the loophole is plugged.
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The simplified law is extracted from the original. The
simplification is done mainly by deletion of certain words which, in my opinion,
over-cloud the understanding of the law by a common taxpayer. Although I have
done my best not to
materially alter the meaning of the law by the simplification, I have to
stress that the original text of the law must be followed in case a
discrepancy of meaning arises. For the full text of the law, please visit