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HONG KONG TAX MAKING AN OFFSHORE CLAIM IN RESPECT OF TRADING PROFITS

by Roddy Sage on May 16, 2012

in Taxation Legislation

Section 14 Inland Revenue Ordinance (“IRO”) clearly states that a person must be carrying on business in Hong Kong before the Inland Revenue Department (“the Department”) can assess the profits derived from that business to Hong Kong profits tax.  However, Section 14 IRO also requires that before a charge to profits tax can arise, the [...]

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WHEN IS A PERSON HELD TO BE CARRYING ON A BUSINESS IN HONG KONG?

by Roddy Sage on May 10, 2012

in Personal Tax, Tax Concessions

In a previous article, I stated that Section 14 Inland Revenue Ordinance (“IRO”) requires that a person must be carrying on a business in Hong Kong from which profits are derived before those profits fall within the charge to profits tax.
When discussing the definition of the word “business”, I concluded that it takes only a [...]

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“CARRYING ON BUSINESS” – A HONG KONG DISCUSSION

May 3, 2012

As I stated in a previous article, profits derived by a person who does not carry on “a trade, profession or business in Hong Kong” will not be subject to Hong Kong profits tax, according to Section 14 Inland Revenue Ordinance (“IRO”), and rarely will that person be required to file a Hong Kong tax [...]

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HONG KONG TAX – THE OBLIGATION TO FILE A PROFITS TAX RETURN

April 30, 2012

During the past two months, the Inland Revenue Department (“the Department”) has sent out profits tax returns to companies that are known to be carrying on business in Hong Kong.  The Department is able to seek such information from a variety of sources, but the fact that a person carrying on business in Hong Kong [...]

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HONG KONG BUDGET 2012-2013

February 1, 2012

Whether you are surprised or disappointed I expect that certain sectors of the community with definitely feel let down by the Financial Secretary (“the FS”).
The FS announced a consolidated surplus of HK$66.7 billion for 2011-2012 making this the 8th consecutive year that the government have announced a budget surplus, and far in excess of that [...]

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WILL THE FINANCIAL SECRETARY LISTEN 2012-13 BUDGET

January 27, 2012

The 2012-13 Budget Speech is due to be delivered by the Financial Secretary, Mr John C Tang, on February 1st 2012. It will be interesting to note the extent to which the Financial Secretary has listened to the representations made by the various Chambers of Commerce and other professional bodies. There seems to [...]

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DOCTRINE OF “LEGITIMATE EXPECTATION” RELIANCE ON THE INLAND REVENUE DEPARTMENT PRACTICE NOTES

December 2, 2011

The case of C.I.R. v CG Lighting Limited was never allowed to proceed to the Court of Final Appeal. Many issues arise from the conduct of this case, but the most galling, in my opinion, was the Commissioner’s insidious instruction to his legal counsel, Mr Eugene Fung, to depart from the guidance given to [...]

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THE COMMISSIONER OF INLAND REVENUE IS REMINDED TO DETERMINE OBJECTIONS WITHIN A REASONABLE TIME

November 2, 2011

Whilst the decision in Li & Fung (Trading) Limited and CIR (HCIA 1/2010) was a most welcome “win” for the taxpayer, in the Court of First Instance the case highlighted another problem that can arise with Hong Kong’s appeal procedure against tax assessments. Reyes J rightly pointed out:
“I fully appreciate that Board members [...]

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IS THERE ANY POINT IN A PERSON APPEALING AGAINST AN UNFAVOURABLE TAX ASSESSMENT?

October 28, 2011

Following the decision in CG Lighting Limited v CIR, I would find it difficult to advise a Hong Kong taxpayer to pursue an appeal through the Hong Kong courts.
Consider this: If a taxpayer is unable to settle an objection against an assessment, the case will be referred to the Commissioner of Inland Revenue (CIR) for [...]

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CG Lighting v CIR – How Much Worse Can It Get?

October 28, 2011

Several colleagues have asked me whether and when I intend to comment on the Hon Tang’s AG CJHC judgment in the case of Commissioner of Inland Revenue v CG Lighting Limited; the unwillingness of the Inland Revenue Department (“the Department”) to consent to CG Lighting Limited’s (“CGL”) application for leave to appeal to the Court [...]

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