1941-HKRS28-8-2_Part01 — Page 25

Deductions sot allowed.

Basis for

puting profits.

10

(e) interest paid or payable for the purpose of producing the profits;

(f) where a person provides passages and/or leave pay for members of his staff proceeding on leave, and places annually to reserve in his accounts a sum to meet his commit- ments in respect thereof. he may claim that such sum be allowed as a deduction, and his claim shall be allowed on such conditions se the Commissioner may prescribe.

19-(1) For the purpose of ascertaining profits no deduction shall be allowed in respect of--

(a) domestic or private expenses, including the cost of travelling between residence and place of business;

(b) any disbursements or expenses not being money expended for the purpose of producing the profits;

(c) any expenditure of a capital nature or any loss of

capital;

(d) the cost of any improvements ;

(e) any sum recoverable under an insurance or contract

of indemnity;

(f) rent of, or expenses in connexion with, any premises or part of premises not occupied or used for the purpose of producing the profits:

(g) any tax paid or payable under this Chapter.

(2) In computing the profite or losses of a partnership, nothing shall be deducted for salaries or other remuneration of partners or for interest on partners' capital or loans.

20.-(1) Save as provided in this section, the assessable profits liable to Profits Tax of any trade, profession or business for any year of assessment shall be the full amount of its profits arising in or derived from the Colony during the year preceding the year of assessment.

(2) Where the Commissioner is satisfied that the accounts of a trade, profession or business carried on or exercised in the Colony are usually made up to some day other than the thirty-first day of March, he may direct that the profits from that source be computed on the amount of the profits of the year ending on that day in the year preceding the rear of assessment. Where, however, the profits of any trade, pro- fession or business have been computed by reference to an account made up to a certain day, and no account is made up to the corresponding day in the year following, the profits from that source both of the year of assessment in which such failure occure and of the two years of assessment following shall be computed on such basis as the Commissioner in his discretion thinks fit.

(8) Where a person commences to carry on a trade, profession or business in the Colony on a day within a year of assessment, the profits arising therefrom for the period from such date to the end of the year of assessment shall be the assessable profits for such year of assessment.

(4) Where a person has commenced to carry on a trade. profession or business on a day within the year preceding a year of assessment, the assessable profits for that year of assessment shall be the profits for one year from such day.

(6) Where a person ceases to carry on a trade, profes- sion or business, the assessable profits therefrom as regards the year of assessment "in which the cessation occurs shall be the amount of the profits of the period beginning on the first day of April in that year and ending on the date of

cessation.

(6) Notwithstanding the provisions of section 55 a claim made under this section to an adjustment of any assessment by reference to the profits for any period other than the year preceding the year of assessment shall be entertained if it is made within the period of twelve months next succeeding the year of assessment. A claim so made shall be regarded as an appeal for the purposes of Chapter VIII.

(7) Where in the case of any trade, profession or business it is necessary in order to arrive at the profits or losses of any year of assessment or other period to divide and apportion to specific periods the profits and losses for any period for which accounts have been made up, or to aggregate any such profits or losses or any apportioned parts thereof, it shall be lawful to make such a division and appor- tionment or aggregation, and any apportionment under this section shall be made in proportion to the number of days in the respective period.

21-(1) For the purposes of this section-

Liability of cartsin non-rezident

(a) a person is closely connected with another person parsons. where the Commissioner in his discretion considers that such persons are substantially identical or that the ultimate con- trolling interest of each is owned or deemed under this section to be owned by the same person or persons;

(b) the controlling interest of a company shall be deemed to be owned by the beneficial owners of ita shares, whether held directly or through nominees, and shares in one company held by or on behalf of another company shall be deemed to be held by the shareholders of the last-mentioned company.

(2) Where a non-resident person carried on business with a resident person with whom he is closely connected and the course of such business is so arranged that it produces to the resident person either no profits or less than the ordinary profits which might be expected to arise, the business done by the non-resident person in pursuance of his connexion with the resident person shall be deemed to be carried on in the Colony, and such non-resident person shall be assessable and chargeable with tax in respect of his profits from such business in the name of the resident person as if the resident person were his agent, and all the provisions of this Ordinance shall apply accordingly.

certain borst.

22. Where the Commissioner in his discretion considers Petits of that the true amount of the profits of a non-resident person ness to be in respect of a trade, profession or business carried on in the pad on Colony cannot be readily ascertained, such profits may be of the computed on a fair percentage of the turnover of that trade turnover. or business in the Colony:

Provided that the amount of such percentage shall be subject to appeal in accordance with the provisions of Chapter VIII.

* percentage

of partner.

23-(1) Where a trade, profession or business is smoot carried on by two or more persons jointly, the tax in respect ships. thereof shall be computed and stated jointly in one sum and a joint assessment shall be made in the partnership name.