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Air Hong Kong tax debacle

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Air Hong Kong tax debacle

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Old 25th Jun 2012, 17:14
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Air Hong Kong tax debacle

AHK crew based in SIN and PEN being told the HKIRD maybe seeking upto 6 years in tax arrears with some facing bills of over US$100k. Well thought out basing strategies by masterminds who haven't got a clue about tax, immigration, legal or social responsibilities.

Latest email from the company to staff indicates that they were employed by a branch of AHK (Hong Kong), not the so called registered companies in Singapore and Malaysia. How so?? In so doing AHK are implying that those employees always had a HKG tax liability (but didn't know it), but at the same time when recruiting also said you fall outside of any tax liability because they were so smart to set up such companies so they could bond the ass off some the new joiners.

So now these pilots have a liability that was sold to them as a benefit, in order that AHK didn't have PAY for higher salaries in a taxed environment to make the job attractive - sponging off the rest of society in order to eek out miserable profits without any social or moral conscience to any community. Well it's not very attractive now, and shame on you AHK management for schirking your responsibilities in this regard.

It's reeks of CX basings amateurism again. Oh that's right, ex CX managers working their magic again over at AHK.

So if you want the pilots to accept the fact that they were always under HKIRD then it would be appropiate they have the work permits too, oh and that would invalidate your ****ty bonding scheme, or you can try and keep up the deception of being employed by Sinapore or Malsysian companies so you can go chasing after those naughty bond breakers. BTW guys when you collect the bond money, did you declare that as earnings. Something else the HKIRD needs to follow up; you might be paying for more than you realize.

Good luck chaps.

Last edited by Bob Hawke; 25th Jun 2012 at 17:17.
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Old 25th Jun 2012, 17:57
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The same issue affects all CX crew on bases. They have tried to pretend that the basings are legitimate in HK law. They are not, but they are still sending out tax info saying that we work for overseas companies. They are doing this on tax forms which can only be illegal in the eyes of HKIRD. HKIRD should tell CX to pay all the back tax to March 2012 and then we can start again.

In fairness the previous GMA, who is now in Canada, was the one who ignored advice from people who knew, (do not include KPMG in that group), and arrogantly blazed a basings trail that will cost CX dear. The longer term legal ramifications will see CX close all the bases, apart from North America. In North American law CX is still a HK company and the law recognises that N/A crews are, in fact, based in HK, just like HKIRD have been saying all along.
Eventually HKIRD will grab the company by the short and curlies.
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Old 25th Jun 2012, 22:11
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on a positive note, I imagine the bond is now unenforceable as there are illegal in hk
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Old 25th Jun 2012, 23:18
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I believe that if you reside in HK for 60 days per tax year, you are liable to pay HK taxes, regardless of your nationality, or the structure of your company, where the pay was deposited, or any agreement. Is this what you are finding out?

FR
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Old 26th Jun 2012, 01:13
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@Aaiguy: it's not a bond. its a 'forgivable' loan
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Old 26th Jun 2012, 01:21
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Not in AHKs case, it's a bond.
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Old 26th Jun 2012, 01:53
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I believe that if you reside in HK for 60 days per tax year, you are liable to pay HK taxes, regardless of your nationality, or the structure of your company, where the pay was deposited, or any agreement.
From the IRD website:

"The Hong Kong tax system is based on the territorial concept. Salaries tax is imposed on all income arising in or derived from Hong Kong from an office or employment or any pension irrespective of whether tax on that income has been paid in other jurisdictions".

In other words, it has nothing to do with your domicile, residency or where you are paid. If the money originates in Hong Kong, then you will be taxed in Hong Kong, as CX basees discovered last year. However, if you perform part of your duties in other countries, you should only be "assessed on the income attributable to the services you rendered in Hong Kong". You must also show that you have paid tax in another jurisdiction.

Last edited by BuzzBox; 26th Jun 2012 at 01:54.
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Old 26th Jun 2012, 03:03
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Buzzbox is 100% correct.
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Old 26th Jun 2012, 04:35
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So if one accepted an offer of employment from what was represented as a non-HK company only to find out years later that they were actually working for a HK company with the tax implications, where would that place the employer?

Would the employee be able to sue in either HK or the "foreign" country that they thought they were employed in?
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Old 26th Jun 2012, 04:49
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So if one accepted an offer of employment from what was represented as a non-HK company only to find out years later that they were actually working for a HK company with the tax implications, where would that place the employer?

Would the employee be able to sue in either HK or the "foreign" country that they thought they were employed in?
Good Question. I would think yes.
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Old 26th Jun 2012, 05:46
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bonding in HKG

Bonds are NOT illegal in HKG, never have been. Go and ask any lawyer for confirmation.
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Old 26th Jun 2012, 06:46
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Not a big deal for RD.
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Old 26th Jun 2012, 07:23
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Welcome to the party boys. Just keep all this mind when you go to work. You can make Cathay/AHK pay for this you know. If this is causing you stress, go see a doctor and go on sick leave for a couple months. And consider all of this while you at work as well. This should be affecting your motivation. BIG TIME.
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Old 26th Jun 2012, 07:37
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If CX based pilots are facing the same issue. Where do they stand as of today. Are they paying the taxed owed for the past xx years to HKIRD? Is no based pilot paying HKIRD? Has HKIRD asked based pilots to pay?
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Old 26th Jun 2012, 08:09
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Talk about a storm in a tea cup with everybody going off half cocked!!

Based Pilots only stopped paying HK Tax 2.5 years ago after Cx incorrectly told us to stop. This has been addressed and we are now paying HK Tax and getting credit back from our home country.

End of story, move on.
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Old 26th Jun 2012, 08:11
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Yes we are pissed off, yes we have a big administrative burden on us, yes it's a lot of paperwork BUT it's sort of fixed.
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Old 26th Jun 2012, 08:19
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There's the rub, AHK has been at it more than 5 years, so there is alot of arrears to be considered, so CX guys are getting off lightly if only 2.5 years.
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Old 26th Jun 2012, 08:30
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We will get all the money back from the ATO anyway, so apart from a little provisional Tax and a pain in the ass paperwork jungle it could be a lot worse.

Change your name, Bob Hawke is a blight on Aviation and his name should never be brought up in polite conversation.
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Old 26th Jun 2012, 10:12
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NP, He sure is. He's selling the country now. Sometimes it's good to be reminded of the dirty little names in the past.

Aside from that the Australian issue is different from SIN & PEN chaps, they've had longer exposure to basing and thus liability. Crews are now actively applying to Scoot, Qatar & Air Asia. The end result will be p155 poor pay in a taxed environment with no benefits. Why hang around?

My thinking is those that created the provlem should pay for the problem.
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Old 26th Jun 2012, 12:46
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I did.. as did many of my friends.. before we f'cked off from HKA.

They ARE illegal.
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