1964_INLAND_REVENUE_ORDINANCE — Page 44

1989 Ed.]

Inland Revenue

[CAP. 112

43

member, director or member of the board of management of the borrower; or

(iii) where the borrower is a corporation, by or on behalf of any

associated corporation,

against a deposit made with that or any other financial institution or overseas financial institution where any sums payable by way of interest on the deposit are not chargeable to tax under this Ordinance; (Amended 7 of 1986 s. 4)

(e) the money has been borrowed wholly and exclusively to

finance-

(i) capital expenditure incurred on the provision of machinery or plant which qualifies for an allowance under Part VI; or (ii) the purchase of trading stock, and such stock is used by the borrower in the production of profits chargeable to tax under this Part,

and the lender is not-

(A) any partner of the borrower; or

(B) where the borrower is a body of persons, whether corporate or unincorporate, any shareholder, member, director or member of the board of management of the borrower; or

(C) where the borrower is a corporation, any associated

corporation; (Replaced 36 of 1984 s. 4. Amended 7 of 1986 s. 4)

(f) the person chargeable to tax is a corporation and the deduction is

in respect of interest payable by that corporation-

(i) on debentures;

(ii) to the holder of any instrument issued-

(A) bona fide and in the course of carrying on business and which is marketable in Hong Kong or in a major financial centre outside Hong Kong approved by the Commissioner for the purposes of this subparagraph;

or

(B) in pursuance of any agreement or arrangements, where the issue of an advertisement or invitation to the public in respect of such agreement or arrangements, or any document which contains such an advertisement or invitation, has been authorized by the Securities and Futures Commission under section 4(2)(g) of the Protection of Investors Ordinance (Cap. 335); or (Amended 10 of 1989 s. 65)

(iii) on moneys borrowed from an associated corporation, where the moneys borrowed in the hands of the associated

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