DIPN 21 for Financial Institutions ▸ Loan interest income Depends on two factors only: (1) Initiation; and (2) Funding Initiation Efforts in obtain the business including solicitation, negotiation and structuring of loans ⚫ If wish to claim offshore, HK FI must prove the participation of the loan is the direct result of the activities done by an associate party outside HK Funding Provision of the money for the loan If wish to claim offshore, (1) HK FI must prove it has no authority to fund the loan; and (2) documentary evidence showing the fund is provided by an offshore associate directly DIPN 21 for Financial Institutions ▸ Loan interest income 。 Tax treatment on interest income from offshore loans: Initiation Outside HK Funding Outside HK Hong Kong Hong Kong Tax treatment 100% non-taxable 100% taxable Outside HK Hong Kong 50% taxable Hong Kong Outside HK 50% taxable 。 Tax treatment on interest income from onshore loans Fully taxable Exemption Order is NOT applicable 83 84

The taxes most relevant for personal financial planning are:     A. Income tax     B. Sales tax     C. Estate tax     D. Consumer tax

Calculation of Foreign Tax Credit (here is the answer for A&F. You need to complete Basket B&D and Basket E

There are two basis of accounting: cash basis and accrual basis. Personal finance often focuses on the cash basis, whereas corporate accounting focuses on the accrual basis, as prescribed by U.S. Generally Accepted Accounting Principles (GAAP). Furthermore, tax filers focus on the modified accrual basis. If you were about to select the basis of accounting for your organization, which basis would you select, and why?