Q：
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What is the meaning of “holiday journey”?
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A：
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According to Section 9(6) of the IRO, the term “holiday journey” can be defined as either “a journey taken for holiday purposes” or “where a journey is taken for holiday and other purposes, the part of the journey taken for holiday purposes”.
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Q：
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What is the tax treatment if the journey partly for business and partly for holiday?
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A：
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The Hong Kong Inland Revenue Department will look at the immediate purpose of the trip in case where a trip is taken partly for business and partly for holiday, and will refrain from taxing the benefit if the holiday element is merely incidental to a business trip. However, in cases where a clearly identifiable part of a journey is taken for holiday purpose, the expenses relating to that part of the journey will have to be ascertained and will be assessable income of the employee.
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Q：
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What should be included as holiday journey benefits?
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A：
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Any amount or any benefit, capable being converted into money by the recipient, paid by an employer in connection with a holiday journey are considered as income from office or employment. The amount to be assessed will be based on the actual amount or actual costs paid by the employer. A benefit is also taxable even if the employer does not incur additional, or incremental costs for that benefit. For example, an employee is entitled to travel business class for business journeys undertaken for the employer. On that particular business journey, the employee trades in the business class air ticket for 2 economy class tickets so that the spouse can travel with him/her. In this case, although there is no additional cost incurred by the employer in providing the spouse’s air ticket, the cost of the spouse’s ticket is actually borne by the employer. Therefore, this is taxable benefit.
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Q：
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What is the meaning of actual “amount paid” by the employer for a holiday journey?
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A：
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The “amount paid” for a holiday journey refers to all kinds of expenses “in connection with” such a journey which include expense on transportation, accommodation, meals, sightseeing tours, travel insurance and visa fees, etc.
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Q：
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Should it be assessed as an income from employment if my employer granted me an allowance to take on my holiday tour, but do not require the allowance to be actually expended for such purpose?
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A：
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It should be assessed as income from employment, regardless whether the employer exercised any control over the use of the said allowance or not. According to Section 9(1)(a) of the IRO, all perquisite and allowance derived from the employer, are included as income from an office or employment. Hence, they are chargeable to tax.
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FAQ
