Page 54 - P6 Slide Taxation - Lecture Day 7 - Various Topics

Independent contractors

• A person is deemed to carry on a trade independently if,

throughout the year of assessment, he or she employs

three or more employees who are engaged on a full-time

basis in the business of the independent contractor.

Aforementioned employees must not be connected

persons in relation to the independent contractor (the

‘independence’ test in the diagram below) (second proviso

to par (ii) of the definition of ‘remuneration’).

• There are two statutory tests to determine whether a

person is an independent contractor for employees’ tax

purposes.

• The statutory tests are conclusive in nature. If they apply, it

means that a person is deemed not to be an independent

contractor for purposes of determining employees’ tax.

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