An employee has a master and servant relationship with his employer. The work of an employee is within the control of his employer as to what to do, how to do and when to do. See Employed versus self-employed for more.

An office holder holds an office created by law or covenants. The office holder¡¦s duties are statutory and irrespective of whoever holding the office. A common example is the director office of a company.

Not all so-called "directors" are office holders in law. If a "director" is employed by a company through an employment contract, he is an employee only, not a "director" for tax purpose.

The income from a Hong Kong employment is taxable in full. The remuneration from a Hong Kong office is taxable in full too. So, in general, whether the income is from a Hong Kong employment or from a Hong Kong office is unimportant.

For a non-Hong Kong employment, the income attributable to services outside Hong Kong is exempt. Furthermore, for an employee performing services in Hong Kong during visits not exceeding 60 days, he is exempt from tax also. But these exemptions do not apply to a Hong Kong office holder. Therefore, for a non-resident working partly in Hong Kong and partly overseas, the distinction of his income between employment and office can affect his tax liability significantly.

In practice, a person may hold the capacity of an employee and an office holder at the same time. If the employment contract does not clearly make a distinction of the remuneration for the two capacities separately, the Revenue may take all the remuneration as taxable income. So, to avoid tax dispute, it is advisable to have the remunerations for these two different capacities clearly defined.