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  Home > Publications and Press Releases > Advance Ruling Cases > Advance Ruling Case No. 15

Advance Ruling Case No. 15


1. The provisions of the Ordinance

  This ruling applies in respect of section 19C(4) of the Inland Revenue Ordinance ("IRO").

 

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2. Background

(a) A partnership business known as X & Y [the Partnership] was carried on by Company X and Company Y as partners in equal shares.
(b) Both Company X and Company Y were incorporated in an overseas Country A.
(c) The board of directors of Company X and Company Y concluded a merger plan under which Company Y merged into Company X with effect from 1 January 2003.
(d) Pursuant to the Public Companies Act of Country A, Company Y was dissolved and without liquidation by transfer of Company Y's rights, assets and liabilities to Company X as the surviving company.
(e) In connection with the merger, the Partnership had ceased to exist. Company X changed its name to CD from 1 January 2003 and its registered office is situated in Country A. CD has its financial accounting year ended 31 December.
(f) The merger has been effected by way of a universal succession in all assets and liabilities of Company Y and of the Partnership by the merged company, CD.

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3. The arrangement

(a) The merging of Company X and Company Y, with Company X as the surviving company, has financial effect from 1 January 2003.
(b) In connection with the merger, Company X has changed its name to CD.
(c) The merger has been effected by way of a universal succession in all assets and liabilities of Company Y and of the Partnership by the merged company, CD.

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4. The ruling

  The tax losses sustained by the Partnership prior to the merger shall be available for set off against CD's assessable profits under section 19C(4) of the IRO.

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5. The period for which the ruling applies

  This ruling will apply for the year of assessment 2003/04 and subsequent years of assessment.

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6. Date of ruling issued

  19 January 2004.

 

 

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