1964_INLAND_REVENUE_ORDINANCE — Page 45

44

CAP. 112]

Inland Revenue

[1989 Ed.

corporation arise entirely from the proceeds of an issue by the associated corporation of debentures or of any such instrument as is described in subparagraph (ii), in an amount not exceeding the interest payable by the associated corporation to the holders of its debentures or of such instruments. (Added 7 of 1986 s. 4)

(3) For the purposes of subsection (2)—

(a) any reference in paragraph (d)(i) or (ii) or paragraph (e)(A) or (B) to—

(i) a borrower or partner of a borrower; or

(ii) a shareholder, member, director or member of the board of management,

who is a natural person, shall be deemed to extend to that person's parents, spouse, child, brother or sister (whether of the whole or half blood) and, in deducing such a relationship, an adopted child shall be deemed to be a child both of the natural parents and of the adopting parent and a step child to be the child both of the natural parents and of any step parent;

(b) an "associated corporation" means-

(i) a corporation over which the borrower has control;

(ii) a corporation which has control over the borrower; or

(iii) a corporation which is under the control of the same person as the borrower,

and, for the purposes of this definition, control shall have the same meaning as it has in section 2(2);

(ba) "debentures" means debentures listed on a stock exchange in Hong Kong or any other stock exchange recognized for the purposes of this paragraph by the Commissioner; (Added 7 of 1986 s. 4)

(c) an "overseas financial institution" means a person carrying on the business of banking or deposit-taking outside Hong Kong other than a person whom the Commissioner has, in accordance with the powers vested in him by subsection (4), determined shall not be recognized for the purposes of subsection (2) as an overseas financial institution. (Added 36 of 1984 s. 4. Amended 7 of 1986 s. 12)

(3A) The rate of interest which was applicable for the purposes of subsection (2)(b) immediately before this section was amended by the Inland Revenue (Amendment) (No. 2) Ordinance 1989 (17 of 1989) shall be applicable for the purposes of this section as amended by that Ordinance until a different rate of interest specified by the Financial Secretary under this section as so amended takes effect. (Section 22(1) of 17 of 1989 incorporated)

1F