CO129-510-15 China (Companies) order in Council- 1925- correspondence 19-4-1928 - 31-12-1928 — Page 56

(3)

56

(4)

(76)

(c)

make the change effective.

The Tax then in operation was 1 cent per $100,

full refund might still be obtained in respect

of Share Capital in Subsidiary Companies in China

of the British-American Tobacco Co. (China) Ltd.

held by the parent China Company.

In December last, and again on the 20th of January last,

our Mr.Perry was granted interviews with the Colonial

Secretary for Hongkong on this subject, and was informed

by the latter that he was only waiting for the question

of the proper procedure to be followed with regard to

the payment of the tax in January, 1928, to be settled

by the Attorney General, and that he hoped to obtain a

definite ruling shortly. No suggestion was made that

that practice of refunding the fees paid by one China

Company in respect of shares held by it in other China

Companies, would be abolished.

We have pointed out to your Government that while Section 7 of the Companies Ordinance 1915 (now renumbered Section 273 of the Companies Ordinance 1911) states that

the Capital Fee payable by China Companies is in lieu of Stamp

Duties on Transfers of Shares, and Probate and Estate Duties

in respect of shares held by deceased shareholders, nevertheless

the very considerable sum paid annually by British-American Tobacco Company (China) Limited as Capital Fee is out of all

proportion to the amount of stamp, Probate or Estate Duty

which might be payable in respect of its shares, as it is a private

Company and practically the whole of its issued capital is held

by a parent Company.

In view of the above facts we trust that your Govern-

ment will amend the proposed bill and insert provisions that no capital fee will in future be payable in respect of shares held by one China Company in a subsidiary or allied China Company.