1989 Ed.]
Inland Revenue
[CAP. 112
49
16E. Purchase and sale of patent rights, etc.
(1) Notwithstanding anything in section 17, in ascertaining the profits from any trade, profession or business in respect of which a person is chargeable to tax under this Part for any year of assessment there shall, subject to subsection (2), be deducted any expenditure incurred by such person during the basis period for that year of assessment (other than any amount which is allowable as a deduction apart from this section) on the purchase of patent rights or rights to any trade mark or design, for use in Hong Kong in the trade, profession or business in the production of such profits. (Amended 7 of 1986 s. 12)
(2) Where any rights of a kind referred to in subsection (1) are purchased partly for use in Hong Kong and partly for use outside Hong Kong the deduction allowable under this section shall be such part of the expenditure referred to in subsection (1) as is, having regard to the extent of the use in Hong Kong, reasonable and appropriate in the circumstances of the case. (Amended 7 of 1986 s. 12)
(3) Where any rights of a kind referred to in subsection (1) in respect of which a deduction has been allowed to any person under this section in ascertaining the profits from a trade, profession or business are thereafter sold by him--
(a) the proceeds of sale; or
(b) if the deduction was one to which subsection (2) applied, such part of the proceeds of sale as relates to the rights in respect of which a deduction was allowed under that subsection,
not being an amount otherwise chargeable to tax under this Part, shall, notwithstanding the exclusion relating to the sale of capital assets contained in section 14, be treated as a trading receipt of the trade, profession or business accruing at the time of sale, or if the sale occurs on or after the date on which the trade, profession or business is permanently discontinued, accruing immediately before the discontinuance.
(4) In this section---
(a) "patent rights" means the right to do or authorize the doing of anything which would, but for that right, be an infringement of a patent; and
(b) a reference to the purchase or sale of rights of a kind referred to in subsection (1) includes a reference to the purchase or sale of a share or interest in any such rights.
(Added 35 of 1983 s. 2)
17. Deductions not allowed
(1) For the purpose of ascertaining profits in respect of which a person is chargeable to tax under this Part no deduction shall be allowed in respect of- (Amended 36 of 1955 s. 25; 49 of 1956 s. 13)
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Page 51
50
CAP. 112]
1989 Ed.]
Inland Revenue
[CAP. 112
49
16E. Purchase and sale of patent rights, etc.
(1) Notwithstanding anything in section 17, in ascertaining the profits from any trade, profession or business in respect of which a person is chargeable to tax under this Part for any year of assessment there shall, subject to subsection (2), be deducted any expenditure incurred by such person during the basis period for that year of assessment (other than any amount which is allowable as a deduction apart from this section) on the purchase of patent rights or rights to any trade mark or design, for use in Hong Kong in the trade, profession or business in the production of such profits. (Amended 7 of 1986 s. 12)
(2) Where any rights of a kind referred to in subsection (1) are purchased partly for use in Hong Kong and partly for use outside Hong Kong the deduction allowable under this section shall be such part of the expenditure referred to in subsection (1) as is, having regard to the extent of the use in Hong Kong, reasonable and appropriate in the circumstances of the case. (Amended 7 of 1986 s. 12)
(3) Where any rights of a kind referred to in subsection (1) in respect of which a deduction has been allowed to any person under this section in ascertaining the profits from a trade, profession or business are thereafter sold by him--
(a) the proceeds of sale; or
(b) if the deduction was one to which subsection (2) applied, such part of the proceeds of sale as relates to the rights in respect of which a deduction was allowed under that subsection,
not being an amount otherwise chargeable to tax under this Part, shall, notwithstanding the exclusion relating to the sale of capital assets contained in section 14, be treated as a trading receipt of the trade, profession or business accruing at the time of sale, or if the sale occurs on or after the date on which the trade, profession or business is permanently discontinued, accruing immediately before the discontinuance.
(4) In this section---
(a) "patent rights" means the right to do or authorize the doing of anything which would, but for that right, be an infringement of a patent; and
(b) a reference to the purchase or sale of rights of a kind referred to in subsection (1) includes a reference to the purchase or sale of a share or interest in any such rights.
(Added 35 of 1983 s. 2)
17. Deductions not allowed
(1) For the purpose of ascertaining profits in respect of which a person is chargeable to tax under this Part no deduction shall be allowed in respect of- (Amended 36 of 1955 s. 25; 49 of 1956 s. 13)
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50
CAP. 112]
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