CAP. 112]
[r. 3 cont.]
(Cap. 112.)
Dividends liable to tax.
Inland Revenue.
(2) Where any accounts prepared by a bank for its own purposes disclose, in the opinion of the Assessor, the true profits of the Hong Kong branch, the assessable profits shall be computed on the basis of such accounts.
(3) Where no accounts are prepared which in the opinion of the Assessor disclose the true profits of the Hong Kong branch, the following provisions shall apply in 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 the Colony and shall be assessed accordingly;
(b) for the purposes of determining the total profits of the bank, similar adjustments for tax purposes will be made in the accounts of the bank as would have been necessary had the whole of those profits been liable to tax under this Ordinance;
(c) where the Assessor is of the opinion that it would be impracticable or inequitable to adopt the provisions of sub-paragraphs (a) and (b) of this paragraph, he may estimate the amount of the profits of the Hong Kong branch, and assess such profits accordingly:
Provided that any decision of an Assessor under this rule shall be subject to appeal in accordance with the provisions of Part XI of the Ordinance.
Note.
This rule applies to non-resident banks operating in Hong Kong. It is expected that the accounts of the Hong Kong branch of most banks will be sufficiently accurate for the computation of the profits of the branch to be based on those accounts.
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 the total assets.
Method of ascertaining the amount of a dividend liable to tax and to be included in the recipient's "total income" as defined in section 42(2).
4. (1) Where a dividend is paid partly out of profits liable to Hong Kong tax and partly out of profits not liable...
Page 358
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į
CAP. 112]
[r. 3 cont.]
(Cap. 112.)
Dividends
liable to tax.
Inland Revenue.
(2) Where any accounts prepared by a bank for its own purposes disclose, in the opinion of the Assessor, the true profits of the Hong Kong branch, the assessable profits shall be computed on the basis of such accounts.
(3) Where no accounts are prepared which in the opinion of the Assessor disclose the true profits of the Hong Kong branch, the following provisions shall apply in 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 the Colony and shall be assessed accordingly;
(b) for the purposes of determining the total profits of the bank, similar adjustments for tax purposes will be made in the accounts of the bank as would have been necessary had the whole of those profits been liable to tax under this Ordinance;
(c) where the Assessor is of the opinion that it would be impracticable or inequitable to adopt the provi- sions of sub-paragraphs (a) and (b) of this para- graph, he may estimate the amount of the profits of the Hong Kong branch, and assess such profits accordingly :
Provided that any decision of an Assessor under this rule shall be subject to appeal in accordance with the provi- sions of Part XI of the Ordinance.
Note.
This rule applies to non-resident banks operating in Hong Kong. It is expected that the accounts of the Hong Kong branch of most banks will be sufficiently accurate for the computation of the profits of the branch to be based on those accounts.
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 the total assets.
Method of ascertaining the amount of a dividend liable to tax and to be included in the recipient's "total income" as defined in section 42(2).
4. (1) Where a dividend is paid partly out of profits liable to Hong Kong tax and partly out of profits not liable
358
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