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Personal Tax

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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THE GOVERNMENT CONTINUES TO REFUSE GROUP RELIEF FOR TAX LOSSES

July 5, 2011

For many years, Hong Kong’s professional bodies and Chambers of Commence have lobbied the Government to amend the Inland Revenue Ordinance to allow group loss relief. Of the many arguments advanced for the introduction of such legislation, the following have consistently found support from lobbyists:
Corporate groups in Hong Kong may:
• pay tax as a group [...]

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OFFSHORE COMMISSION INCOME A WIN FOR THE TAXPAYER CIR v LI AND FUNG

July 5, 2011

The facts of the case are that Li and Fung (“L&F”) assisted its customers in connection with the manufacture, sale and purchase of goods, for which it received a commission of 6% of the total FOB value of the customer’s export sales. L&F had entered into contracts with its offshore affiliates to perform certain [...]

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OFFSHORE MANUFACTURING THE BATTLE CONTINUES

July 5, 2011

The case of Commissioner of Inland Revenue v CG Lighting Limited continues. Since my last comment on this case, the judgment of the Court of Appeal has been handed down.
The Court of Appeal’s decision, delivered by The Hon Tang Ag CJHC, dismissed the appeal by CG Lighting Limited (“CGL”) against Fok J’s judgment in [...]

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Offshore Profits – Re-invoicing Trough Hong Kong

October 26, 2010

The change in practice by the Inland Revenue Department (“the Department”) regarding the assessment of profits booked in a re-invoicing vehicle located in Hong Kong continues to be a cause for concern.
Paragraph 27 of the Departmental Interpretation and Practice Notes No.21 (Revised), dated December 2009 (“DIPN”), clearly states that it is [...]

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Budget Thoughts – The Misuse of Hong Kong’s Tax System

February 19, 2010

It has become a custom for the Financial Secretary, John Tsang Chun-wah, to leak a few details of his budget measures before he delivers his budget speech.  This year is no exception.  So far this year, it has been suggested that we can expect a salaries tax rebate, a waiver of [...]

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Hong Kong Budget – Further Considerations

February 10, 2010

The budget proposals issued by the Hong Kong Institute of Certified Public Accountants, The Hong Kong General Chamber of Commerce, The British Chamber of Commerce in Hong Kong and The Taxation Institute of Hong Kong always provide interesting reading. Furthermore, they give a very useful overview of the business community’s wish list for the [...]

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Budget Mania

February 8, 2010

It is that time of year when people, typically tax partners of the larger accounting firms, attempt to predict the Hong Kong Government’s budget surplus/deficit for the current year. This is often accompanied by a call for a reduction in the rate of profits tax, i.e. the corporate tax rate. Experience has shown [...]

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Misled By The Inland Revenue Department?

November 18, 2009

When I arrived in Hong Kong in the early 1980’s obtaining a copy of the Inland Revenue Department’s Assessor’s Manual was considered essential, but extremely difficult to acquire.  Gradually the Assessor’s Manual has been replaced by a series of Departmental Interpretation and Practice Notes (DIPNs).  Whereas the Assessor’s Manual had [...]

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2010 Budget Wish List

November 9, 2009

With Hong Kong’s budget only four months away, give or take a few weeks, now is the time to make your own views known to the Financial Secretary, Mr John Tsang.
People may consider this a futile exercise, but in my opinion this is far from being the case.  The 2009 budget lacked substance, or at [...]

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