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Status of Tax Cases

Status of Tax Cases as at 31 July 2018

( Note : Headnotes of judgements not available in respect of "cases not yet finalized")


Cases Finalized Pending Publication or Cases Not Yet Finalized:-
Relating to Inland Revenue Ordinance

Cases finalized, pending publication :-

Cases finalized, pending publication
Taxpayer's NameIssues under AppealCourtCurrent Position
King Global Investments Ltd

[HCIA 5/2016]

Chargeability of profits derived from sale of property.
CFI
By a judgment dated 10 February 2017, CFI refused the Taxpayer's application for leave to appeal against the Board of Review's decision.
Right Margin Ltd

[HCIA 4/2016]

Whether a provision for bad debt is deductible
 CFI
By a judgment dated 12 October 2017, CFI refused the Commissioner's application for leave to appeal against the Board of Review's decision.
 
Pang Fai
 
Whether honorarium received by workshop facilitator and examination marker from a professional body should be assessed under Salaries Tax or Profits Tax.

[Leave Application : HCIA 2/2016]

 CFI
By a judgment dated 3 November 2017, CFI dismissed the Commissioner's appeal against the Board of Review's decision.

Headnotes

Crown Brilliance Ltd
 
Chargeability of profits derived from the sale of property.
 CFI
By a judgment dated 14 October 2015, CFI allowed the Commissioner's appeal and remitted the case to the Board of Review with its opinion thereon. After hearing the remitted case, the Board dismissed the Taxpayer's appeal in February 2018.
 
Turner Entertainment Networks Asia, Inc. for Muse Communication Co., Ltd

[CACV 259/2012]

Chargeability of licence fees received for granting the right to exhibit TV programmes outside Hong Kong and technical costs received for providing subtitled tracks for the TV programmes.

[Previous CFI Case No.: HCIA 4/2010]

CA
By a judgment dated 22 October 2012, CFI ruled that the licence fees, but not the technical costs, were chargeable to tax.  The Taxpayer appealed to CA on the chargeability of the licence fees.  By a judgment dated 28 May 2015, CA dismissed the Taxpayer's appeal.
 
Good Mark Industrial Ltd

[CACV 90/2014]

Judicial review of the Commissioner's refusal to accept the Taxpayer's late application made under Section 70A.


[Previous CFI Case No.: HCAL 88/2012]

CA
By a judgment dated 3 February 2015, CA dismissed the Taxpayer's appeal.  CA refused the Taxpayer's application for leave to appeal to CFA.
Aviation Fuel Supply Company

[FACV 14/2013]

Taxability of a lump sum payment – capital or revenue receipt.

Balancing charges.

[Previous CFI Case No.: HCIA 6/2009]

[Previous CA Case No.: CACV 150/2011]

CFA
 
Appeal leapfrogged to CFI under Section 67 of the IRO. By a judgment dated 8 July 2011, CFI allowed the Taxpayer's appeal. The Commissioner appealed to CA on two alternative grounds : (1) the payment was of revenue nature; or (2) balancing charges be brought into account if the payment were a capital receipt. CA allowed the Commissioner to raise the issue regarding balancing charges but dismissed the appeal on 4 December 2012. The Commissioner appealed to CFA on the issue of balancing charges. By a judgment dated 15 December 2014, CFA dismissed the Commissioner's appeal.
 

Cases not yet finalized :-

Cases not yet finalized
Taxpayer's Name Issues under Appeal Court Current Position
China Mobile Hong Kong Co Ltd
 
Deductibility of amortisation of upfront lump sum spectrum utilisation fees
CFI
By a decision dated 27 February 2018, CFI ordered the Taxpayer to file and serve on the Commissioner a fresh statement setting out the grounds of the appeal and the reasons why leave to appeal should be granted.  The Commissioner did not object to the fresh statement.  The appeal will be heard on 10 September 2019.
 
Poon Cho Ming, John

[CACV 94/2016]

Whether payment in lieu of a discretionary bonus and gain realized by the exercise of share options vested upon termination of employment should be chargeable to Salaries Tax.

[Previous CFI Case No.: HCIA 2/2015]

CA
By a judgment dated 1 June 2018, CA allowed the Taxpayer’s appeal. The Commissioner has applied to the Court of Appeal for leave to appeal.
KWP Quarry Co Ltd
 
[CACV 256/2017]
Deductibility of overburden removal costs incurred in quarrying activities.
 
[Previous CFI Case No.: HCAL 102/2016]
 
 CA
By a judgment dated 10 October 2017, CFI dismissed the Taxpayer’s application for judicial review of the Board of Review’s decision refusing to state a case on a question of law for the opinion of CFI. The Taxpayer’s appeal to CA will be heard on 11 April 2019.
 
Perfekta Enterprises Ltd

[CACV 115/2017]

Whether an “Initial Payment” received under a property redevelopment agreement should be chargeable to Profits Tax.

[Previous CFI Case No.: HCIA 1/2016]

CA
CA handed down its judgment on 1 June 2018. Both the Commissioner and the Taxpayer have applied to the Court of Appeal for leave to appeal.
 
Church Body of the Hong Kong Sheng Kung Hui

[FACV 16/2015]

 

Chargeability of share of profits.

[Previous CFI Case No.: HCIA 2/2009]

[Previous CA Case No.: CACV 41/2010]

[Previous CFA Case No.: FAMV 11/2015]

CFA
By a judgment dated 11 September 2014, CA allowed the Taxpayer’s appeal and remitted the case back to the Board of Review to determine the date of change of intention.  After the grant of leave to appeal by CFA, the Commissioner appealed against the judgment.  The appeal to CFA was dismissed on 4 February 2016.  The order of remittal issued by CA would be followed.
 
Hong Kong Sheng Kung Hui Foundation

[FACV 16/2015]

Chargeability of share of profits.

[Previous CFI Case No.: HCIA 3/2009]

[Previous CA Case No.: CACV 41/2010]

[Previous CFA Case No.: FAMV 11/2015]

CFA
By a judgment dated 11 September 2014, CA allowed the Taxpayer’s appeal and remitted the case back to the Board of Review to determine the date of change of intention. After the grant of leave to appeal by CFA, the Commissioner appealed against the judgment. The appeal to CFA was dismissed on 4 February 2016. The order of remittal issued by CA would be followed.
 

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Cases Finalized Pending Publication or Cases Not Yet Finalized :-
Relating to Estate Duty Ordinance

Cases finalized, pending publication :-

Cases finalized, pending publication
Taxpayer's NameIssues under AppealCourtCurrent Position
Deceased's name

TANG Wing-cheung

[CAMP 69/17]

Appellant

TANG Siu-wing and TANG Chui-yuk Angela

Whether a promissory note payable to the deceased by a Hong Kong company was dutiable.
 
[Previous CFI Case No. HCED1/13]
Court of Appeal
By a judgment dated 23 October 2017, the Court of First Instance dismissed the duty payer’s appeal. The duty payer’s application for leave to appeal was refused by the Court of First Instance on 24 November 2017 and the Court of Appeal on 20 March 2018.

Cases not yet finalized :-

Cases not yet finalized
Taxpayer's NameIssues under AppealCourtCurrent Position
Deceased's name

JAN Yun-bor

[HCED 1/04]

Appellants
KAO Kim John
 

Whether payment from the deceased to her son out of the proceeds of sale of her Taiwan property amounted to gifts inter vivos.
Court of First Instance
Date of hearing not yet fixed.
Deceased's name

KUNG WONG Sau-hin

[HCED 1/11]

Appellant

KUNG Kwok-wai David

 
Whether the assessed value of the deceased's interests in various private companies, NT lots and estate of her predeceased husband were excessive, and whether the debt due by the deceased in the form of promissory note was deductible.
Court of First Instance
Date of hearing not yet fixed.

 

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Cases Finalized Pending Publication or Cases Not Yet Finalized :-
Relating to Stamp Duty Ordinance

Cases finalized, pending publication :-

Cases finalized, pending publication
Taxpayer's NameIssues under AppealCourtCurrent Position
Feng Hongyan
Judicial review application on the Collector of Stamp Revenue’s decision to refuse partial refund of ad valorem stamp duty under section 29DF of the Stamp Duty Ordinance (Cap. 117)
 
Court of First Instance  
By a judgment dated 30 May 2018, the duty payer's application for judicial review was dismissed.
So Kam Shing and So Kam Wai
Whether a distribution of an estate property in excess of the beneficiaries' entitlement under the intestacy should be chargeable with stamp duty and whether section 10(2) of the Stamp Duty Ordinance (Cap. 117) should be applicable.
 
District Court  
By a decision dated 10 May 2018, the duty payer's appeal was dismissed.
Lucky Project Development Limited
 
Whether a tender form submitted by the Appellant constituted an agreement for sale under section 29A(1) of the Stamp Duty Ordinance (Cap. 117) and whether the Stamp Duty (Amendment) (No. 2) Ordinance 2014 should be applicable.
 
District Court 
By a decision dated 16 March 2018, the duty payer's appeal was dismissed.
WONG Wing Wah
Whether leave should be granted to allow the Appellant to lodge late appeal with bank guarantee under sections 14(1B) and 14(5B) of the Stamp Duty Ordinance (Cap. 117).
 
 District Court
By a decision dated 16 March 2018, the duty payer's originating summons was dismissed. 
Danix Limited

[DCSA 3/2012]

Sanforce Limited

[DCSA 4/2012]

Whether the Court has jurisdiction to strike out the appeal, and if the Court has jurisdiction to grant an extension of time in respect of the time limit stipulated in section 14(2) of the Stamp Duty Ordinance (Cap. 117), whether the Court should exercise its discretion.
District Court
 
By a judgment dated 2 February 2018, the duty payers' appeals was struck out.
Ho Kwok Tai

[CACV 52/2016]

Judicial review application on the Collector of Stamp Revenue’s decision to refuse partial refund of ad valorem stamp duty under section 29DF of the Stamp Duty Ordinance (Cap. 117).

[Previous CFI Case No.: HCAL 49/2015]

Court of Appeal
By a judgment dated 18 February 2016, the duty payer's application for judicial review was allowed by the Court of First Instance. The Collector of Stamp Revenue lodged an appeal with the Court of Appeal. On 31 October 2016, the Court of Appeal handed down a favourable judgment allowing the Collector's appeal.
Wong Chak Sin

[DCSA 19/2014]

Whether the sale and purchase agreement for a residential property executed by a father for his daughter who was a minor should be chargeable to Buyer’s Stamp Duty.
District Court
By a decision dated 8 January 2016, the duty payer's appeal was dismissed.

Headnotes

Cases not yet finalized :-

Cases not yet finalized
Taxpayer's NameIssues under AppealCourtCurrent Position
Ngai Sau Ying

[DCSA 15/2017]

Hung Ip Shing

[DCSA 16/2017]

Whether two separate assignments constitute an exchange of property for the purpose of section 25(7) of the Stamp Duty Ordinance (Cap. 117).
District Court
By a judgment dated 11 June 2018, District Court allowed the duty payers' appeals. The Collector has applied to the District Court for leave to appeal.