XN000022-1997-04-30 — Page 25

Inland Revenue (Amendment) (No. 2) Bill 1997

Following is the speech by the acting Secretary for the Treasury, Mr Kevin Ho, in moving the second reading of the Inland Revenue (Amendment) (No. 2) Bill 1997 in the Legislative Council today (Wednesday):

Mr President,

I move that the Inland Revenue (Amendment) (No. 2) Bill 1997 be read the second time.

The Bill mainly seeks to implement the 1997-98 Budget proposal to provide certainty in law in respect of the deduction in the assessment of profits of foreign withholding tax paid by a company on income which is subject to profits tax in Hong Kong. It seeks to allow the foreign withholding tax deduction irrespective of whether the company concerned is controlled or managed in Hong Kong. This reflects a judicial decision that foreign withholding tax charged on income or turnover is a legitimate expense and should be deductible in determining assessable profits regardless of the residency status of the company concerned. The amendment will encourage overseas companies to set up branch operations in Hong Kong, thereby strengthening our status as an international financial and commercial centre.

The opportunity is also taken to amend the Inland Revenue Ordinance in order to improve the operation of the Board of Review (Inland Revenue) and other aspects of the Ordinance. The amendments involved are minor and technical in nature and do not have major taxation policy implications.

Mr President, with these remarks, I commend the Bill to Members.

End

Estate Duty (Amendment) Bill 1997

Following is the speech by the acting Secretary for the Treasury, Mr Kevin Ho, in moving the second reading of the Estate Duty (Amendment) Bill 1997 in the Legislative Council today (Wednesday):

Mr President,

I move that the Estate Duty (Amendment) Bill 1997 be read the second time.