XN000022-1992-03-11 — Page 16

15

WEDNESDAY, MARCH 11, 1992

WILL

IF

"BY EXEMPTING THEM FROM PROFITS TAX, THE BILL

ENCOURAGE SHIPS TO JOIN OUR REGISTER AND SO PROVIDE A LARGE, EVEN UNQUANTIFIABLE BENEFIT TO THE ECONOMY GENERALLY, THE SECRETARY SAID.

MORE

14

DESCRIBING THE REVENUE IMPLICATIONS AS SMALL, MR YEUNG SAID THE NOTIONAL COST TO REVENUE OF THE EXEMPTION WOULD BE LESS THAN $30 MILLION A YEAR.

"AND,

FEES AND ADDED.

THE

OF COURSE, WE EXPECT MOST OF THIS TO BE MADE UP

THE CHARGES PAID BY NEW SHIPS COMING ONTO

FOR BY

..

HE

REGISTER,

SECRETARY SAID THE BILL SOUGHT TO MAKE TWO OTHER THE FIRST OF THESE RELATED TO CHARTER HIRE.

CHANGES.

"FEW OPERATORS SIGN CHARTER CONTRACTS TAXABLE UNDER HONG KONG LAW,'

+

NEVERTHELESS,

WHICH

PRODUCE INCOME

THERE WAS SOME DISINCENTIVE FOR SIGN CHARTERING CONTRACTS IN HONG KONG, BECAUSE OF LIABILITY TO PROFITS TAX, HE SAID.

SHIP-OWNERS

то

THEIR POTENTIAL

THE BILL SOUGHT TO REMOVE THIS UNCERTAINTY BY NOT CHARGING

TAX PROFITS

A ON THE CHARTER HIRE INCOME ATTRIBUTABLE TO

PERMANENT ESTABLISHMENT MAINTAINED IN HONG KONG OF EITHER HONG KONG-REGISTERED OR OVERSEAS REGISTERED SHIPS.

THE

FINALLY, THE OPPORTUNITY WAS TAKEN IN THE BILL TO CLARIFY LIABILITIES OF AIRLINES TO PROFITS TAX ON THEIR CHARTER HIRE INCOME.

"AS A RESULT OF THIS CHANGE, AIRLINES WILL BE ABLE TO CALCULATE THEIR TAX LIABILITY FROM THEIR OWN RECORDS," HE ADDED.

THE SECRETARY SAID IT WAS NOW OVER A YEAR SINCE THE GOVERNMENT ANNOUNCED ITS INTENTION TO INTRODUCE THIS LEGISLATION.

STRAIGHT-FORWARD,

"ALTHOUGH THE PRINCIPLES BEHIND THE BILL ARE PROTRACTED CONSULTATIONS HAVE BEEN NECESSARY WITH THE SHIPPING AND AIRLINE INDUSTRIES ON MATTERS OF TECHNICAL DETAIL.

RANGE

OF

THAT

AND

AIRLINE

"THESE INCLUDE, IN PARTICULAR, AN EXTENSIVE DEFINITIONS TO COVER THE WIDE VARIETY OF DIFFERENT CIRCUMSTANCES

OF CAN APPLY IN DETERMINING THE TAX LIABILITY OPERATIONS, HE SAID.

SHIPPING

YEUNG MR

WOULD

SAID IT WAS PARTLY IN ANTICIPATION OF DIFFICULTIES INVOLVED THAT THE GOVERNMENT ANNOUNCED THAT THE 1990, THE DATE ON WHICH BE EFFECTIVE FROM DECEMBER 3, SHIPPING REGISTER WAS ESTABLISHED.

THE

THE

DRAFTING MEASURES NEW

HAVE

DRAFTING

"I BELIEVE THAT THE TIME TAKEN HAS BEEN WORTHWHILE, AS WE BEEN ABLE TO REACH AGREEMENT WITH THE INDUSTRIES CONCERNED NOT ONLY ON

PRINCIPLES THE

BEHIND THE BILL, BUT ALSO ON

IMPORTANT

TECHNICALITIES.

/"THE RESULT