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Advance Ruling Cases

Rulings are published for general reference only. Caution should be exercised in relying upon the rulings. Reference can only be made to a ruling if the facts are identical to the proposed transactions. To that end it should be borne in mind that similar transactions often have different facts. If there are any doubts as to the similarity of the proposed transactions the taxpayer should request a ruling. Caution should also be exercised to ensure that the relevant provisions of the Ordinance or the relevant case law interpretation and practice of those provisions have not changed as the Inland Revenue Department is bound to apply the current taxation law. Similarly, a ruling may no longer be appropriate if an administrative practice outlined therein turns out to be used as a tax avoidance device.

In order to protect taxpayer confidentiality, the Department will edit the selected rulings prior to publication. Accordingly, all information that may enable identification of the taxpayer will be removed from the edited version.

The Department will not update the rulings published on the website to reflect any subsequent changes of the tax law.

 

Advance Ruling Index

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Carrying on a trade, profession or business in Hong Kong
 

Case No. Provision of the I.R.O. in respect of which ruling applies Index
13 section 14
  • Whether the non-resident person carried on business in Hong Kong through an agent
  • Source of profits – trading
16 section 14
  • Whether the non-resident person carried on business in Hong Kong through an agent
  • Source of profits – service income
26 section 14
  • Whether carrying on a trade, profession or business in Hong Kong
  • Source of profits – service income
44 sections 14 and 20(2)
  • Whether carrying on a trade, profession or business in Hong Kong
  • Tax liability of certain non-resident person

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Change of accounting date
 

Case No. Provision of the I.R.O. in respect of which ruling applies Index
2 section 18E
  • Change of accounting date
  • Entities commencing business on or after 1 April 1974
3 section 18E
  • Change of accounting date
  • Entities commencing business before 1 April 1974
17 section 18E
  • Change of accounting date
  • Entities commencing business on or after 1 April 1974
18 section 18E
  • Change of accounting date
  • Entities commencing business on or after 1 April 1974 and entities commencing business before 1 April 1974
20 section 18E
  • Change of accounting date
  • Entities commencing business on or after 1 April 1974
24 section 18E
  • Change of accounting date
  • Entities commencing business on or after 1 April 1974
29 section 18E
  • Change of accounting date
  • Entities commencing business on or after 1 April 1974 and entities commencing business before 1 April 1974
  • Applicability of section 61A
38 section 18E
  • Change of accounting date
  • Entities commencing business on or after 1 April 1974 and entities commencing business before 1 April 1974
  • Applicability of section 61A
39 section 18E
  • Change of accounting date
  • Entities commencing business on or after 1 April 1974
41 section 18E
  • Change of accounting date
  • Entities commencing business on or after 1 April 1974
42 section 18E
  • Change of accounting date
  • Entities commencing business before 1 April 1974
49 section 18E
  • Change of accounting date
  • Entities commencing business on or after 1 April 1974
51 section 18E
  • Change of accounting date
  • Entities commencing business on or after 1 April 1974 and entities commencing business before 1 April 1974
  • Applicability of section 61A
63 section 18E
  • Change of accounting date
  • Entities commencing business on or after 1 April 1974

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Charter hire income
 

Case No. Provision of the I.R.O. in respect of which ruling applies Index
31 sections 23B(3) and 23B(12)
  • Chargeability of charter hire income

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Contracts deemed as leases
 

Case No. Provision of the I.R.O. in respect of which ruling applies Index
28 sections 14(1), 16(1), 16(1)(ga), 16F(1), 16G(1), 18F(1), 33A(1), 34(1), 34(2), 39B(1) and 39B(2)
  • Contracts deemed as leases under HKAS17 and HKFRS-Int 4

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Court-free company amalgamation
 

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Case No. Provision of the I.R.O. in respect of which ruling applies Index
55 sections 14, 16, 19C, 51, 61A and 61B
  • Court-free company amalgamation
  • Applicability of sections 61A and 61B
  • Treatment of loss
  • Deductibility of interest expense
56 sections 14, 33A, 35, 39B, 39D, 51, 61 and 61A
  • Court-free company amalgamation
  • Applicability of sections 61 and 61A
  • Claim for allowance
  • Obligation to file tax returns
57 sections 19C, 61A and 61B
  • Court-free company amalgamation
  • Applicability of sections 61A and 61B
  • Treatment of loss
58 sections 14, 19C(4), 51(1), 61A and 61B
  • Court-free company amalgamation
  • Treatment of loss
  • Obligation to file tax returns
  • Applicability of sections 61A and 61B
59 sections 14, 19C(4), 51(1), 61, 61A and 61B
  • Court-free company amalgamation
  • Treatment of loss
  • Obligation to file tax returns
  • Applicability of sections 61, 61A and 61B
61 sections 14, 19C(4), 51(1), 61A and 61B
  • Court-free company amalgamation
  • Treatment of loss
  • Obligation to file tax returns
  • Applicability of sections 61A and 61B
62 sections 14, 33A, 35, 39B, 39D, 51, 61 and 61A
  • Court-free company amalgamation
  • Claim for allowance
  • Obligation to file tax returns
  • Applicability of sections 61 and 61A
64 sections 14, 19C(4), 51(1), 61, 61A and 61B
  • Court-free company amalgamation
  • Treatment of loss
  • Obligation to file tax returns
  • Applicability of sections 61, 61A and 61B
65 sections 14, 19C(4), 33A, 35, 39B, 39D, 51(1), 61, 61A and 61B
  • Court-free company amalgamation
  • Treatment of loss
  • Claim for allowance
  • Obligation to file tax returns
  • Applicability of sections 61, 61A and 61B

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Employee's share-based benefits
 

Case No. Provision of the I.R.O. in respect of which ruling applies Index
22 sections 8 and 9(1)
  • Employee's share-based benefits
32 sections 9(1) and 52
  • Employee's share-based benefits
  • Employer's obligations
33 sections 8, 9 and 16(1)
  • Employee's share-based benefits
  • Deductibility of contribution by employer

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Income from life insurance products
 

Case No. Provision of the I.R.O. in respect of which ruling applies Index
9 sections 14, 16 and 23(1)(a)
  • A life insurance corporation
  • Whether sum received is "premium from life insurance premium"
  • Deductibility of certain expenses
  • Ascertainment of assessable profits

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Management and licence fees of professional practices
 

Case No. Provision of the I.R.O. in respect of which ruling applies Index
6 sections 16 and 22(3)
  • Deductibility of certain expenses
  • Assessment of partnership

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Sale of business
 

Case No. Provision of the I.R.O. in respect of which ruling applies Index
5 sections 14 and 61A
  • Sale of business
  • Capital or revenue receipts
  • Applicability of section 61A

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Severance payment received by employee
 

Case No. Provision of the I.R.O. in respect of which ruling applies Index
25 sections 8 and 9
  • Severance payment received by employee
  • Employer's obligations

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Source of interest income
 

Case No. Provision of the I.R.O. in respect of which ruling applies Index
50 sections 14 and 15(1)(f)
  • Source of interest income
53 sections 14 and 15(1)(f)
  • Source of interest income

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Source of profits
 

Case No. Provision of the I.R.O. in respect of which ruling applies Index
4 section 14
  • Source of profits – trading
8 section 14
  • Source of profits – trading
10 section 14
  • Source of profits – trading
  • Profits not eligible for apportionment
11 section 14
  • Source of profits – trading
12 section 14
  • Source of profits – trading
19 section 14
  • Source of profits – manufacturing
  • Apportionment of profits on 50:50 basis
21 section 14
  • Source of profits – trading
23 section 14
  • Source of profits – service income
30 section 14
  • Source of profits – service income
34 section 14
  • Source of profits – trading
35 section 14
  • Source of profits – trading
36 section 14
  • Source of profits – service income
37 section 14
  • Source of profits – trading
40 section 14
  • Source of profits – trading
43 section 14
  • Source of profits – trading
45 section 14
  • Source of profits – service income
46 section 14
  • Source of profits – service income
48 sections 14 and 16
  • Source of profits – trading
  • Deductibility of associated expenses
54 section 14
  • Source of profits – trading
60 sections 14 and 26(a)
  • Source of profits
  • Exclusion of dividend income

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Tax liability of non-resident person
 

Case No. Provision of the I.R.O. in respect of which ruling applies Index
14 section 20(2)
  • Tax liability of certain non-resident person
27 section 20(2)
  • Tax liability of certain non-resident person

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Treatment of losses upon restructuring, change in shareholding and merger
 

Case No. Provision of the I.R.O. in respect of which ruling applies Index
1 sections 19C and 61B
  • Change in shareholding
  • Treatment of losses
  • Utilization of losses to avoid tax
7 sections 19C and 61A
  • Business restructuring
  • Treatment of losses
  • Applicability of section 61A
15 section 19C(4)
  • Treatment of losses upon merger
52 sections 19C, 61, 61A and 61B
  • Change in shareholding
  • Treatment of losses
  • Applicability of sections 61, 61A and 61B

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Waiver of loans
 

Case No. Provision of the I.R.O. in respect of which ruling applies Index
47 sections 14(1), 15(1)(c), 15(2), 61 and 61A
  • Whether profits from business
  • Whether deemed trading receipts
  • Applicability of sections 61 and 61A