XN000022-1986-05-21 — Page 3

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WEDNESDAY, MAY 21, 1986

IS GOING

+ IN FACT MR HUI YIN-FAT, A MEMBER OF THE AD HOC GROUP TO MOVE A COMMITTEE STAGE AMENDMENT TO THE BILL TO PRESERVE THE EXISTING ARRANGEMENT OF A MONTHLY VISIT, HE SAID, AND THE ADMINISTRATION WOULD SUPPORT THIS COMMITTEE STAGE AMENDMENT.

HE NOTED THAT THE WORK OF THESE TREATMENT CENTRES WAS A VALUABLE SERVICE TO THOSE MOST IN NEED OF HELP IN CURING THEIR ADDICTION TO NARCOTICS AND HE WAS SURE +MEMBERS WILL WISH TO SUPPORT THESE REFINEMENTS TO THE LEGISLATIVE FRAMEWORK UNDER WHICH THEY OPERATE.+

DEBATE ON THE BILL WAS ADJOURNED.

EXAMINATION OF DOUBLE TAXATION ISSUE

*****

THE COMMISSIONER OF INLAND REVENUE WILL EXAMINE THE ISSUE OF DOUBLE TAXATION, WHICH COULD ARISE FOR SOME COMPANIES TRADING WITH CHINA, THE LEGISLATIVE COUNCIL WAS TOLD TODAY (WEDNESDAY).

REPLYING TO A QUESTION FROM THE HON THOMAS CLYDESDALE, THE FINANCIAL SECRETARY, THE HON SIR JOHN BREMRIDGE, SAID: +GIVEN THE CONCERN EXPRESSED, AND ITS SOURCE, I SHALL ASK THE COMMISSIONER OF INLAND REVENUE TO CONSULT WITH THE TAXATION SUB-COMMITTEE OF THE GENERAL CHAMBER OF COMMERCE.

+HE WILL EXAMINE ALL THE ISSUES, INCLUDING IF AND HOW THE PROBLEMS OF TAXATION OF HONG KONG SOURCED INCOME BY OTHER JURISDICTIONS MIGHT BE OVERCOME WITHOUT SIGNIFICANT LOSS OF REVENUE OR THE CREATION OF EXPENSIVE PRECEDENTS+.

SIR JOHN SAID THAT AS A RESULT OF INCREASING INVOLVEMENT

OF HONG KONG COMPANIES AND THEIR EMPLOYEES IN BUSINESS ACTIVITIES IN THE PEOPLE'S REPUBLIC OF CHINA, AND THE POSSIBILITY OF DIFFERING VIEWS BEING TAKEN ON THE SOURCE OF INCOME ARISING THEREFROM, IT WAS LIKELY THAT SOME HONG KONG SOURCED INCOME WAS BEING TAXED THERE.

HOWEVER, HE WAS NOT YET CONVINCED THAT IT POSED A SERIOUS THREAT TO THE CONTINUATION OF HONG KONG AS A SUITABLE' BASE FOR TRADE WITH CHINA OR ELSEWHERE.

SIR JOHN SAID DOUBLE TAXATION AROSE WHEN THE SAME INCOME WAS LIABLE TO TAX IN TWO JURISDICTIONS.

ITEM OF

+RELIEF CAN BE PROVIDED EITHER BY ONE TAX AUTHORITY RELINQUISHING ITS CLAIM TO TAX IN FAVOUR OF ANOTHER, OR BY ONE TAX AUTHORITY ALLOWING TAX PAID TO ANOTHER AS A DEDUCTION AGAINST INCOME OR AS A CREDIT AGAINST TAX ASSESSED, HE SAID.

/+THE CORNERSTONE