TNAG-1609-FCO40-22131-Minutes-and-Hansards-of-the-Legislative-Council-of-Hong-Kong-1987 — Page 60

DRAFT

DRAFT SPEECH BY DR/HON HELMUT SOHMEN

LEGISLATIVE COUNCIL 25.11.87

2nd Version

MR. SOHMEN:

Inland Revenue (Amendment)) (No.2) Bil11987

Sir,

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l.c.

I have little to add to Mr. Peter POON's remarks on

this Bill other than to say that I also fully support it. There have been many calls in Hong Kong over the years for double taxation relief, and the proposed legislation goes a long way to achieve it in an equitable manner creating, hopefully, fewer administrative difficulties.

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There has been considerable debate among the experts.

following the Financial Secretary's announcement in his last Budget Speech, suggesting then that new legislation would be based on automatic time apportionment for persons subject to salaries tax rendering services outside Hong Kong for more than

already referred to by Mr. POON 60 days in total. In the event, a judicial decision has forced a re-assessment, resulting in the present Bill. Its provisions are on the one hand more precise than automatic time apportionment and on the other hand more sweeping in a sense, since once the conditions in Section 2 of the Bill are met, Hong Kong tax relief is fully available irrespective of the actual quantum of tax paid in the other jurisdiction.

•

While tax laws are more regularly commented upon or

criticised by those defending the position of the taxpayers, as legislators we must assure ourselves that proposed tax

legislation also adequately protects the revenue. I was somewhat concerned that the terminology in clause 2(c) (i) of the Bill referring to "substantially the same nature as salaries tax when describing the income chargeable to tax elsewhere might create loopholes through interpretative

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