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Advance Ruling Case No. 17

1. The provisions of the Ordinance

  This ruling applies in respect of section 18E of the Inland Revenue Ordinance.

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2. Background

(a) Company A, Company B and Company C ("the Applicants") were incorporated in Hong Kong and they commenced business after 1 April 1974.
(b) The Applicants are companies within the same Group. The holding company of the Applicants is Company D, a company incorporated in Country X.
(c) In 2003, Company D was acquired by Company F. After the acquisition, Company F became the new ultimate holding company of the Applicants.
(d) The Applicants make up their accounts to 31 December whereas Company F makes up its accounts to 30 June.


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3. The arrangement

(a) The Applicants will change the accounting date from 31 December to 30 June in the year of assessment 2004/2005.
(b) The reason put forward by the Applicants for the change of accounting date is to conform to the accounting date of Company F.

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4. The ruling

(a) The Commissioner will adopt the six-month period from 1 January 2004 to 30 June 2004 as the basis period of the Applicants for the year of assessment 2004/2005.
(b) The assessable profits/adjusted losses of the Applicants for the year of assessment 2003/2004 will not be recomputed as a result of the change of their accounting date from 31 December to 30 June.


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5. The period for which the ruling applies

  This ruling applies to the Applicants for the years of assessment 2003/2004 and 2004/2005.

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6. The material assumptions in respect of a future event or any other matter made by the Commissioner

  There are no assumptions made by the Commissioner.

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7 . Date of ruling issued

  24 August 2004.