DIEL
*
Enclosure No.
Legal Supplement No. 1
TO THE
HONG KONG
GOVERNMENT GAZETTE
Published by Authority
FRIDAY, 7 NOVEMBER, 1980
SUP. TO GAZETTE No. 45 VOL. CXXII
PRINTED AND Published By D. R. RICK, GOVERNMENT PRINTER AT THE GOVERNment Press, JAVA ROAD, HONG KONG
INLAND REVENUE (AMENDMENT) (NO. 4)
L.S.
HONG KONG
No. 63 OF 1980
I assent.
Ord. No. 63/80
A361
JACK CATER, Acting Governor.
6 November 1980.
An Ordinance to amend the Inland Revenue Ordinance.
[7 November 1980]
Enacted by the Governor of Hong Kong, with the advice and consent
of the Legislative Council thereof.
1. This Ordinance may be cited as the Inland Revenue (Amendment) Short title. (No. 4) Ordinance 1980.
2. The principal Ordinance is amended by adding, after section 36, Addition of the following section-
new section
36A.
36A. (1) Except where otherwise provided, in relation (Cap. 112.)
"Application
of provisions
to the initial and annual allowances on machinery or plant-
to machinery
or plant.
3.
(a) sections 37, 37A, 38 and 39 shall apply to the years of assessment up to and including the year of assessment commencing on the 1st April 1979; and
(b) sections 39B, 39C and 39D shall apply to the year of assessment commencing on the 1st April 1980 and to subsequent years of assessment.
(2) Where in relation to any machinery or plant the Commissioner is satisfied that in respect of any year of assessment commencing on or after the 1st April 1980 the application of any of the provisions of the sections referred to in subsection (1)(b) is impracticable or inequitable, he may direct that the provisions of the sections referred to in subsection (1)(a) shall apply to the extent and for the dura- tion specified in the direction.".
The principal Ordinance is amended by adding, after section 39A, Addition of the following-
"Initial and annual
allowances on machinery or plant under
the pooling
system.
39B. (1) Where a person carrying on a trade, profes- sion or business incurs capital expenditure on the provision of machinery or plant for the purposes of producing profits chargeable to tax under Part IV then, except where such expenditure is expenditure of a kind described in section 16B(1)(b), there shall be made to him, for the year of assessment in the basis period for which the expenditure is incurred, an allowance, to be known as an "initial allowance", equal to one-quarter of such expenditure.
(2) Where during the basis period for any year of assessment or during the basis period for any earlier year of assessment a person owns or has owned and has in use or has had in use any machinery or plant for the purposes of producing profits chargeable to tax under Part IV, there
new sections 39B, 39C and 39D.
A362
Ord. No. 63/80
(63 of 1980.)
INLAND REVENUE (AMENDMENT) (NO. 4)
INLAND REVENUE (AMENDMENT) (NO. 4)
Ord. No. 63/80
A363
ry
shall be made to him in respect of each class of mad or plant for that year of assessment an allowance, to be known as an "annual allowance", for depreciation by wear and tear of such machinery or plant.
(3) The annual allowance shall be calculated at the rates of depreciation prescribed by the Board of Inland Revenue and shall be computed on the reducing value of each class of machinery or plant.
(4) Subject to subsections (5), (6) and (7), the reducing value of a class of machinery or plant shall be the aggregate capital expenditure incurred on the provision of the machinery or plant belonging to that class reduced by-
(a) the aggregate of any initial allowances computed in accordance with section 37 in respect of any machinery or plant belonging to that class; (b) the aggregate of any annual allowances computed in accordance with section 37 in respect of any machinery or plant belonging to that class;
(c) the aggregate of any initial allowances computed in accordance with this section in respect of any machinery or plant belonging to that class;
(d) any annual allowance computed in accordance with
this section;
(e) any sale, insurance, salvage or compensation_moneys received in respect of any machinery or plant be- longing to that class; and
(f) any reducing value of machinery or plant excluded from the total reducing value of a class of machinery or plant under section 39Ċ(3).
(5) Where, prior to the commencement of the Inland Revenue (Amendment) (No. 4) Ordinance 1980, any machinery or plant has been the subject of a balancing allowance or balancing charge computed in accordance with section 38, such machinery or plant shall, for the purposes of subsection (4), be excluded from the class of machinery or plant.
(6) Where any machinery or plant is owned and used by a person for any period immediately before he uses it for the purposes of producing profits chargeable to tax under Part IV, the capital expenditure incurred on the provision of the machinery or plant for the purposes of subsection (4) shall be computed by deducting from the actual cost the notional amount of the annual allowances which would have been made under section 37 to the owner if since acquiring the machinery or plant he had used it for the purpose of producing profits chargeable to tax under
Part IV.
(7) If a person succeeds to any trade, profession or business which immediately before the succession—
(a) was carried on by another person; and
(b) the machinery or plant that was used at any time by that other person for the purpose of producing profits chargeable to tax under Part IV is not sold to the successor,
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Pooling system when not to apply.
(63 of 1980.)
(63 of 1980.)
the reducing value of such machinery or plant shall, for the purpose of computing annual allowances under subsection (3), be taken to be the reducing value thereof still unallowed to that other person as at the time of succession.
(8) Notwithstanding subsection (7), no initial allowance shall be made under this Part by virtue of subsection (7).
(9) No annual allowance shall be made where the reductions made under subsection (4) exceed the aggregate capital expenditure incurred on the provision of the class of machinery or plant.
(10) Nothing in subsection (2) shall apply in respect of any machinery or plant owned and used by a person for the purposes of his trade or business where such machinery or plant represents scientific research expenditure of a capital nature which pursuant to section 16B(1)(b) has been allowed as a deduction in ascertaining the profits from such trade or business in respect of which such person is charge- able to tax under Part IV for any year of assessment.
(11) The Commissioner may in his discretion allow a higher rate of depreciation in respect of any class of machinery or plant than that prescribed by the Board of Inland Revenue.
39C. (1) The provisions of this Part which applied immediately prior to the commencement of the Inland Revenue (Amendment) (No. 4) Ordinance 1980 shall continue to apply-
(a) subject to subsection (2), in respect of machinery
or plant to which section 37A applies;
(b) in respect of machinery or plant to which section
39A applies.
(2) Where, pursuant to the terms and conditions of a hire purchase agreement, machinery or plant to which section 37A applies passes into the ownership of the person carrying on a trade, profession or business who incurred the capital expenditure under the hire purchase agreement, the reducing value of such machinery or plant computed in accordance with that section shall be included in the class of machinery or plant for the purposes of section 39B for the years of assessment following the year of assessment during the basis period for which the machinery or plant passed into the ownership of that person.
(3) Where any machinery or plant which is included in a class of machinery or plant for the purposes of section 39B and which was used wholly and exclusively in the production of profits chargeable to tax under Part IV is subsequently not so used wholly and exclusively in the production of such profits, the provisions of this Part which applied immediately prior to the commencement of the Inland Revenue (Amendment) (No. 4) Ordinance 1980 shall apply to such machinery or plant in respect of the year of assessment during the basis period for which the machinery or plant is subsequently not used wholly and exclusively in the production of profits chargeable to tax under Part IV,
No comments yet.
Private notes are available after approval.