ACCA P6 Advanced Taxation - Hot Topics for DEC 2014 Exam

What materials to focus now:

During the last 10 days or so before the real exam, you are advised to review the key topics as
discussed in the classes. The key areas are mainly included in the relevant mind maps:

(a) Scope of profits tax charge (s. 14 and s. 15 of IRO and DTA Articles 7 and 5);
(b) Profits tax adjustments (general deduction rules under s. 16, s. 17; specific deduction for interest
expenses re DIPN 13A; allowance or deduction for fixed assets (DIPN 5 & 49);
(c) Updated DIPN for profits tax re source of profit (DIPN 21), source of royalty income (DIPN 49),
transfer pricing (DIPN 46 & DIPN 48), and DTA (DIPN 44);
(d) Scope of salaries tax charge (s.8 and s.9A (Type I arrangement & DIPN 25) of IRO and
DTA Articles 14);
(e) Salaries tax adjustments re s. 9(1), s. 9(2A), s. 11D, s. 12(1), concessionary deductions, personal
allowances and DIPN 38;
(f) Scope of property tax charge (s. 5), NAV (s. 5B) and tax under PA (s. 41 & s. 42);
(g) Tax administration under IRO re compliance (s. 51, s. 52, s. 51C, s. 51D),
penalty (s. 80, s. 82, s. 82A) and investigation power (DIPN 11); assessment (s. 59, s. 60, s. 70) and
recovery actions; reasonable excuse, objection (s. 64), appeal to BOR (s. 66), error or
omission claim (s. 70A) and holdover of tax in dispute and provisional tax;
(g) Scope of stamp duty charge under Head 1 and Head 2 of SDO; duty amount, exemptions under
s. 27(5) and s. 45 group relief, timing and liable persons; SOIPN 5 for SSD; and
(h) Tax planning re outside scope of charge and beneficial tax adjustments.

Revision Q&A See content page 2 and remember to practice again the typical questions
as discussed. Reinforce understanding and practice what you know now but NOT to focus
what you do not understand!

What has been examined in June 2014: Q1 - Deemed trading receipt re media IPR; source of service
income & interest income; transfer pricing; deduction of incorporation fee, MPF, interest expenses, PFA,
profits tax computation; Q2 SD for property; share option; interest expense under PA and parent
allowances; Q3 salaries tax, staff salary deduction & DTA; Q4 IBA/ CBA & redevelopment; Q5 staff
termination and tax collection.

The common exam areas:

As in previous diets, I try my best to have professional guess of expected topics for coming exam.
Note this is not questions spotting, as you probably need to cover a wide range of possible subject areas
to pass the exam. Review again the typical questions practiced in progress test, and the two mock
exams the analysis of which is summarized below:

Late objection, s. 70A claim and holdover of tax;

Royalty income and deduction;
Tax treatments on interest income, interest expenses, disposal gain, and revaluation gain;
Stamp duty on purchasing undervalued shop;
Tax treatments on termination payment, inducement payment, payment for education course, MPF,
housing arrangement, club membership fee, cash coupon, holiday benefit, personal allowances,
property tax and PA, share option gain and tax planning measures.
Stamp duty and IRO issues on purported income;
Source issue (DIPN 21), re-invoicing and tax planning issues.
Investigation and tax audit under DIPN 11; settlement methods, business records keeping and penal
action.

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 ACCA P6 Hot Topics

Gain on disposal and change of intention; interest paid on construction unrealised gain and
diminution in value;
Contract of and contract for services; retirement benefit, SSD.
Appeal to BOR; offshore source claim; salaries tax exemption; investment income & DTA; advance
ruling.
Change of accounting date; IPR deduction; deduction or allowances on fixed assets;
Various fixed assets deduction;
Assessments, additional assessments, anti-avoidance provisions and further appeal procedures.

Profits tax computation including treatment on interest income, dividend, interest expenses,
construction costs; depreciation allowances; legal costs, long service payment, e-trade & DIPN 39.
s. 9A type I service company.
SSD, late stamping, and estimated assessments.
Bonus, housing benefit, share options and clubs.
DIPN 49 Part B re royalty income and deduction under DIPN 49 Part A re IPR expenditure.

Dont forget the common but useful exam skills: Remember to manage your time
(1 mark = 1.8 minutes); apply the IAS approach for long question, write in application style, read the
questions carefully and answer what is asked; study all the key topics and latest updates; writing simple
and clear English (see sample writings); and be confident if you dont pass, no one in the world can
pass!

Contact me at mike.li@hkcaexam.com or 9800 7750 in case you need final help. Believe in yourself and
you can pass. Good luck from all of us!

Mike Li
Principal
HKCA Learning Media Limited

23 Nov 2014

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