WEDNESDAY, JUNE 13, 1934
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BILL ALSO HELPS DETER TAX AVOIDANCE
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FOR PROFITS TAX PURPOSES, THE COMMISSIONER OF INLAND REVENUE WILL EXAMINE EACH CASE CAREFULLY TO DETERMINE WHETHER A BUSINESS IS CARRIED ON IN HONG KONG, THE FINANCIAL SECRETARY, THE HON SIR JOHN BREMRIDGE, TOLD THE LEGISLATIVE COUNCIL TODAY.
SIR JOHN WAS SPEAKING AT THE RESUMED DEBATE ON THE INLAND REVENUE (AMENDMENT) BILL 1984 WHICH, AMONG OTHER THINGS, PROPOSED TO CHARGE TO PROFITS TAX SUMS RECEIVED BY, OR ACCRUING BY WAY OF INTEREST TO, BUSINESSES CARRIED ON IN HONG KONG.
THESE SUMS HAD PREVIOUSLY ESCAPED THE TAX NET, EITHER BECAUSE THE DEPOSITS WERE DENOMINATED IN A FOREIGN CURRENCY, OR BECAUSE OF THE APPLICATION OF THE ARTIFICAL +PROVISION OF CREDIT TEST.
EXPRESSING HIS DETERMINATION TO COUNTER TAX AVOIDANCE, SIR JOHN SAID, +1 AM SURE THAT THE BILL WILL IN PART HELP TO ACHIEVE THIS OBJECTIVE WITHOUT KINDERING GENUINE BUSINESS BORROWINGS OR DAMPENING THE INTEREST OF POTENTIAL FOREIGN INVESTORS IN HẠNG KONG.
+ IT IS WORTH BEARING IN MIND THAT COMPLICATED LAW ARISES ONLY FROM THE NEED TO COUNTERACT BYZANTINE AVOIDANCE MEASURES.+
NOTING THE CONCERN THAT HAD BEEN EXPRESSED OVER THE PHRASE +CARRYING ON BUSINESS IN HONG KONG+, HE SAID THIS WAS A TECHNICAL EXPRESSION WELL KNOWN IN TAXATION LAW WHICH, HOWEVER, WAS +UNFORTUNATELY NOT CAPABLE OF PRECISE DEFINITION. +
*THE QUESTION AS TO WHETHER A PERSON IS OR IS NOT CARRYING ON A BUSINESS IN HONG KONG CAN ONLY BE DETERMINED BY TAKING INTO ACCOUNT ALL THE RELEVANT FACTS OF THAT SITUATION.
+HOWEVER, I CAN ASSURE HONOURABLE MEMBERS THAT THE COMMISSIONER OF INLAND REVENUE WILL, AS USUAL, EXAMINE EACH CASE CAREFULLY, SIR JOHN SAID.
THE COMMISSIONER WILL ALSO ISSUE A DEPARTMENTAL INTERPRETATION AND PRACTICE NOTE GIVING GUIDANCE ON THIS MATTER AFTER THE ENACTMENT OF THE BILL.
+1 CONFIRM ALSO THAT THE ADMINISTRATION WILL REMAIN OPEN TO FURTHER REPRESENTATIONS IF UNFORESEEN PROBLEMS ARISE,+ SIR JOHN SAID.
THE COUNCIL PASSED THE BILL INTO LAWS, INCORPORATING AMENDMENTS PROPOSED BY UNOFFICIAL MEMBERS.
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