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Is the employee insurance agent subject to salaries tax for receiving the advance payment?

In addition to the salary and commission during the employment period, the insurance company also has the opportunity to prepay the insurance agent a sum of money to induce him to sign an employment contract and continue to provide services to his company in the future. They will agree that if the agent resigns before the expiry of the term of employment, the agent must refund part of the original advance payment in proportion. The prepayments mentioned above are:

• Income from employment

• Related to the role of the agent

• Advance salary for services provided in the future

Therefore, salaries tax must be paid in full. As for the part of the advance payment refunded by the agent later, since the refund is not complete, pure, and the expenses incurred to generate assessable income, it will not be deducted. However, the Inland Revenue Department may consider revising the salaries tax assessment to reflect the amount of the refund. The above information is for reference only. If in doubt, we welcome your tax inquiries

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