The Exemption from Salaries Tax and Profits Tax (Anti-epidemic Fund (“AEF”) Order (“the Exemption Order”) exempts individuals and businesses from the payment of salaries tax and profits tax in respect of financial assistance or relief provided under the AEF, subject to certain conditions. It applies for the year of assessment commencing on 1 April 2019 and for all subsequent years of assessment. The following are the frequently asked questions regarding the Exemption Order:

Q:	Under AEF, an eligible employer will receive a subsidy for paying wages. Are these wages, funded by subsidy under AEF, received by an employee subject to salaries tax?
A:	The wages received by the employee are income from employment and is subject to salaries tax.
Q:	Is an employer required to report payment received by employees under AEF in the employer’s return?
A:	An employer is not required to report in the employer’s return those subsidy/grant/allowance that are exempted from salaries tax.
Q:	What if an employer has reported payment received by employees under AEF in the employer’s return?
A:	In such case, the employer is required to furnish replacement IR56B forms to exclude those exempted items.
Q:	Do I need to report payment received under AEF in the Tax Return-Individuals?
A:	No necessary, as those subsidy/grant/allowance that are exempted from salaries tax.
Q:	What kind of sums are not exempted under the Exemption Order?
A:	The exemption does not apply to sums that are received by, or accrued to, the person as receipts arising in or derived from Hong Kong from a trade, profession or business carried on in Hong Kong, which include but are not limited to – 1. Proceeds of sale of goods; 2. Consideration for provision of services; and 3. Monies received from the letting, sub-letting or licensing of any premises or portion of any premises.