583069-1940-War-Revenue-Ord--1940--Rules-made-by-the-Board-of-War-Taxation — Page 3

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THE HONG KONG GOVERNMENT GAZETTE, AUGUST 30, 1940.

Bank means any bank whose head office is outside this Colony;

'Hong Kong branch means the business carried on in Hong Kong by any such bank:

Other branch" means the business carried on by a bank in any place outside Hong Kong, including that carried on at its principal place of business.

2. Where any accounts prepared by a bank for its own purposes disclose, in the opinion of the Commissioner, the true profits of the Hong Kong branch, the profits of the Hong Kong branch shall, for the purposes of assessment, be computed on the basis of such accounts. Where no accounts are prepared which in the opinion of the Commissioner dis- close the true profits of the Hong Kong branch, the following provisions shall apply to the determination of such profits-

(a) the same proportion of the total profits of the bank as the assets of the Hong Kong branch bear to the total assets of the bank shall be treated as profits made from transactions in this Colony and shall be assessed accordingly;

(b) when the said total profits have been computed on a basis which differs materially from that prescribed in the Ordinance, the ratio of profits shall be adjusted so as to correspond as nearly as possible to the ratio which would have been arrived at if the total profits had been computed in accordance with the provisions of the Ordinance :

Where it appears expedient to the Commissioner he may, in relation to any exchange transaction, instead of acting under the provisions of sub-paragraphs (a) and (b) of this paragraph, estimate the amount of the profits from the transaction and assess such profits accordingly.

1940.

Made by the Board of War Taxation this 9th day of July,

Approved by the Legislative Council this 29th day of August, 1940.

C. BRAMALL Burgess,

NOTES.

Deputy Clerk of Councils.

RULE II.

This rule applies to non-resident banks operating in Hong Kong.

Paragraph 2.It is expected that the accounts of the Hong Kong branches of banks will be sufficiently accurate for the computation of the profits of the branch to be based upon them.

Where, however, either no branch accounts are prepared, or the Hong Kong branch accounts are so merged with the accounts of other branches as to make it difficult to compute the true profits, provision is made for the profits to be ascertained by apportioning the total profits of the bank in the ratio of the Hong Kong assets to total assets.