T
15
WEDNESDAY, MAY 27, 1987
IT HAD BEEN SUGGESTED THAT BECAUSE THE SECTION DID NOT EXPRESSLY SAY THAT THIS CONSIDERATION WAS AN INCOME RECEIPT, IT COULD BE ARGUED THAT SUCH RECEIPT AROSE FROM THE SALE OF A CAPITAL ASSET AND WAS THEREFORE NOT CHARGEABLE TO PROFITS TAX.
+WHILST THE POINT MAY BE ARGUABLE, I AGREE THAT WE SHOULD SEEK CLARITY, + HE SAID.
HE ADDED THAT THE AMENDMENT IN NO WAY EXTENDED THE SCOPE OF THIS ANTI-AVOIDANCE MEASURE FROM THAT DESCRIBED IN THE BUDGET SPEECH
NEITHER DID IT SEEK TO AND EXPLANATORY MEMORANDUM TO THE BILL. RENDER ONSHORE, AND THEREFORE ASSESSABLE, THE CONSIDERATION RECEIVED FOR THE TRANSFER OF A STREAM OF OFFSHORE INCOME.
HE SAID THERE COULD BE NO QUESTION OF THIS PIECE OF LEGISLATION BEING IN BREACH OF THE TERRITORIAL SOURCE PRINCIPLE WHICH IS FUNDAMENTAL TO THE TAXATION SYSTEM.
INLAND REVENUE BILL SUPPORTED
* * *
CONVENER OF THE OMELCO TAXATION PANEL, THE HON PETER POON SAID THE PANEL HAD CONSIDERED A PROPOSED AMENDMENT TO SECTION 15A(1) OF THE INLAND REVENUE (AMENDMENT) BILL 1987 WHICH WOULD MAKE IT ABSOLUTELY CERTAIN THAT THE CONSIDERATION RECEIVED FOR THE TRANSFER OF A RIGHT TO RECEIVE INCOME FROM PROPERTY SHOULD BE CONSIDERED AS A TRADING RECEIPT.
POON THE ON THE MR POON WAS SPEAKING DURING THE RESUMED DEBATE ON THE BILL IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY), WHICH SEEKS TO AMEND THE PRINCIPAL ORDINANCE MAINLY TO PROVIDE FOR VARIOUS CONCESSIONS IN THE AREAS OF PERSONAL, PROFIT, PROPERTY AND INTEREST TAXATION.
THE PANEL WAS SATISFIED THAT THE PROPOSED AMENDMENT WAS DESIRABLE TO ELIMINATE ANY DOUBT AS TO THE PURPOSE AND EFFECTIVENESS OF THE NEW ANTI-AVOIDANCE PROVISION AGAINST THE SO-CALLED MYER' SCHEME, HE ADDED.
MR POON SAID THAT THE PANEL HAD RECEIVED A REPRESENTATION FROM AN ACCOUNTING FIRM WHICH SOUGHT CLARIFICATION AS TO WHETHER THE WORDS 'DEEMED TO BE IN THE NEW SECTION 15A OF THE BILL WOULD HAVE THE EFFECT OF INCLUDING OFFSHORE PROFITS.
AFTER A MEETING WITH THE ADMINISTRATION, THE PANEL WAS SATISFIED THAT THERE WOULD BE NO SUCH EFFECT AS IT WAS CLEARLY DEFINED IN THE BILL THAT THE INCOME FOR THE PURPOSE OF SECTION 15A WOULD ONLY COVER INCOME OR PROFITS ARISING IN OR DERIVED FROM HONG KONG, HE SAID.
/16