TNAG-1490-FCO40-2047-Hong-Kong-Inland-Revenue-(Amendment)-Bill-1986-1986 — Page 8

Ref. SCR 1/2201/85

Sir,

Enclosure No. 1

Government Secretariat

Hong Kong

27 May 1986

I am directed by the Deputy to the Governor to

submit for the signification of Her Majesty's pleasure an

Ordinance intituled:

Enclosure No. 2

Enclosure No. 3

Enclosure No. 4

"Inland Revenue (Amendment) (No. 2)

Ordinance 1986."

This Ordinance was passed by the Legislative Council on

the 30th day of April 1986.

2

In accordance with clause XXVIII of the Royal

Instructions, an explanatory report by the Law Draftsman

showing the reasons and occasion for passing the Ordinance

is enclosed. A copy of the Gazette Supplement containing

the Ordinance is also enclosed, together with a copy of

the Bill.

4 Enclosures

(each in duplicate)

I have the honour to be, Sir,

Your most obedient, humble servant,

(LAW Kam-sang) for Chief Secretary

SECRETARY OF STATE FOR FOREIGN & COMMONWEALTH AFFAIRS

HONG KONG

LEGAL REPORT

THE INLAND REVENUE (AMENDMENT) (NO. 2) ORDINANCE 1986

(No. 19 of 1986)

Enclosure No. 2

This Ordinance implements the 1986 Budget proposals for concessions in respect of profits and personal taxes.

2. Section 15 of the Inland Revenue Ordinance was amended in 1984 to introduce profits tax on interest accruing from the carrying on of a business in Hong Kong, notwithstanding that the funds from which the interest is derived were made available outside Hong Kong. Similar provision was made in the case of gains or profits accruing from transactions in certificates of deposit and bills of exchange.

3. Section 2 restores the former position, namely that interest, gains or profits are chargeable to tax so long as they arise in or are derived from Hong Kong.

4. In the case of financial institutions, interest on offshore funds was already taxable under section 15(1)(i) prior to 1984. Section 2 inserts a provision to ensure that the 1984 extension to gains or profits on transactions in certificates of deposit and bills of exchange will continue to apply to financial institutions.

5. Section 3 is consequential upon section 2. Section 4 provides for modest increases in personal and dependent parent allowances, and section 5 applies the new allowances to provisional salaries tax for 1986-7.

6.

Before the Governor assented to the Bill in the name and on behalf of Her Majesty, the Attorney General advised that he could properly do so.

Аши

سکتا

Law Draftsman.

4 May 1986.

ATTORNEY GENERAL'S CHAMBERS,

HONG KONG.

MON

TU

DRO

Legal Supplement No. 1

TO THE

Enclosure No. 3

HONG KONG

GOVERNMENT GAZETTE

Published by Authority

FRIDAY, 2 MAY, 1986

SUP. TO GAZETTE No. 18 VOL. CXXVIII