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Volume 17 Third Supplement

Publication Date: Jul 2003

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DIGEST OF CASES REPORTED

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  Decision No. Download
PENALTY TAX    

incorrect tax return - whether interest rate excessive - s 82A of the Inland Revenue Ordinance ('IRO')  

D78/02 Download D78/02 (DOC) - English Download D78/02 (PDF) - English
PERSONAL ASSESSMENT    

whether result of personal assessment fair and equitable - whether the Commissioner should exercise the discretion provided in s 64(2) - whether the provisions of the Inland Revenue Ordinance ('IRO') are unfair or against the Basic Law - ss 5(1), 5(1A), 41, 42, 42A, 43 and 64(2) of the IRO - Articles 8, 11 and 25 of the Basic Law  

D64/02 Download D64/02 (DOC) - English Download D64/02 (PDF) - English
PROFITS TAX    

partnership - loss carried forward by a partner - whether set off available - s 19C of the Inland Revenue Ordinance ('IRO')  

D65/02 Download D65/02 (DOC) - English Download D65/02 (PDF) - English

sale of a three-storey house erected on a piece of New Territories land - definition of 'trade' - whether chargeable to property tax - depends on whether the sale of a property is trading in nature - it is crucial to ascertain the intention of the taxpayer at the time of acquisition of the property - the stated intention of the taxpayer is not decisive - actual intention has to be tested against objective facts and circumstances - evidence is needed to substantiate the contention of the taxpayer - the circumstances and facts of the case cast doubt on the veracity of the taxpayer - burden of proof on the taxpayer - ss 2, 14(1), 16 and 68(4) of the Inland Revenue Ordinance ('IRO')  

D93/02 Download D93/02 (DOC) - English Download D93/02 (PDF) - English

sale of small house building - whether beneficial owner. [Decision in Chinese]  

D99/02 Download D99/02 (DOC) - Traditional Chinese Download D99/02 (PDF) - Traditional Chinese

ss 14(1) and 68(4) of the Inland Revenue Ordinance - intention at the time of acquisition - onus of proof on the appellant to show that the intention to invest on capital asset was realistic and realizable. [Decision in Chinese]  

D97/02 Download D97/02 (DOC) - Traditional Chinese Download D97/02 (PDF) - Traditional Chinese

ss 16(1), 17, 61 and 68(4) of the Inland Revenue Ordinance ('IRO') - whether or not an expense was incurred for the production of assessable profits - whether or not management fees are capable of sub-division and analysis - whether or not artificial transactions - burden of proof on taxpayer  

D85/02 Download D85/02 (DOC) - English Download D85/02 (PDF) - English

whether certain sums are deductible as outgoings and expenses under s 16(1) - mere compliance with s 16(1) is not sufficient, it must also not be excluded under s 17(1) - whether the transaction was 'artificial or fictitious' - any contemporaneous document in support - must show he did incur liability for rental in respect of such user and the amounts claimed were attributable to the liabilities which he so incurred - burden of proof on the appellant - ss 14, 16, 17, 61 and 68(4) of the Inland Revenue Ordinance ('IRO')  

D82/02 Download D82/02 (DOC) - English Download D82/02 (PDF) - English

whether the gains arising from the disposal of property were liable for profits tax - whether expenses should be allowed - ss 14(1) and 68(4) of the Inland Revenue Ordinance. [Decision in Chinese]  

D94/02 Download D94/02 (DOC) - Traditional Chinese Download D94/02 (PDF) - Traditional Chinese

whether the sale of a property was trading in nature - it was crucial to ascertain the intention of the appellant at the time of acquisition of the property - the stated intention of the appellant was not decisive - actual intention had to be determined objectively - burden of proof on the appellant - definition of 'trade' - incumbent on the appellant to substantiate his contention - ss 2, 14(1) and 68(4) of the Inland Revenue Ordinance ('IRO')  

D70/02 Download D70/02 (DOC) - English Download D70/02 (PDF) - English
PROPERTY TAX    

whether certain items can be deducted from the rental income for the purpose of arriving at a net sum chargeable to property tax - legislature allows a flat rate of 20% per annum deduction for 'repairs and outgoings' - includes any cost of repair of the building that the owner may have to contribute - deduction for rates - appellants must show the rates were the subject of agreement between them and the tenant - neither here nor there that the appellants may have incurred over 20% of their rental income on repair - burden on appellants to show what actual cost of repair or maintenance was incurred or whether they did incur repair or maintenance cost higher than the 20% allowance - ss 5, 5B and 42 of the Inland Revenue Ordinance ('IRO') - s 10B(1) and (2) of the Interpretation and General Clauses Ordinance  

D71/02 Download D71/02 (DOC) - English Download D71/02 (PDF) - English

whether rental income derived from the leasing of car-parking spaces in the common area of a housing estate subject to property tax - should all owners be named - uncertainty over the identities of co-owners - whether owners of non-residential units liable - ss 5(1), 5B(2), 51, 56A, 59(2)(b), 63 and 68(8) of the Inland Revenue Ordinance ('IRO')  

D80/02 Download D80/02 (DOC) - English Download D80/02 (PDF) - English
SALARIES TAX    

application under s 70A of the Inland Revenue Ordinance ('IRO') for correction of the assessment - intention of s 70A of the IRO - powers of assessor to correct errors - what sort of error envisaged by s 70A - whether that error on the part of the assessor constituted an arithmetical error or omission in the calculation of the amount of the assessable income within the meaning of s 70A - erred in construing the word 'entitled' as 'paid' is not the sort of error envisaged by s 70A - laxity on the part of the appellant in processing its case - repeated opportunities to rectify the error - failed to properly exercise his rights to challenge the assessment under ss 64(1) and 66 of the IRO - ss 9A(1), 51(1), 59(2), 64(1), 66, 68, 70 and 70A of the IRO  

D91/02 Download D91/02 (DOC) - English Download D91/02 (PDF) - English

discourteous treatment by the Revenue - no relevance to tax liability  

D73/02 Download D73/02 (DOC) - English Download D73/02 (PDF) - English

employment - source of income - s 8(1), 8(1A) and 8(1B) of the Inland Revenue Ordinance ('IRO') - costs - nature of advice  

D95/02 Download D95/02 (DOC) - English Download D95/02 (PDF) - English

employment - source of income - whether liable to salaries tax - whether rental value assessable - foreign marriage - ss 2, 8(1), 8(1A), 8(1B), 9(1)(b), 9(2) and 29(1)(a) of the Inland Revenue Ordinance ('IRO') - hearing in the absence of the appellant  

D76/02 Download D76/02 (DOC) - English Download D76/02 (PDF) - English

gratuity - whether upon termination of employment - s 9(2) of the Inland Revenue Ordinance ('IRO')  

D60/02 Download D60/02 (DOC) - English Download D60/02 (PDF) - English

home loan deduction - attorney of estate - mortgage repayment - whether home loan interest - s 26E of the Inland Revenue Ordinance ('IRO')  

D84/02 Download D84/02 (DOC) - English Download D84/02 (PDF) - English

onus of proof - s 68 of the Inland Revenue Ordinance ('IRO') - no legitimate expectation that the Inland Revenue Department ('IRD') would anticipate what the tax representative might say shortly before the hearing of the appeal - whether or not required to identify the employer concerned - grounds to challenge assessment based on assets betterment statement - frivolous and vexatious appeal  

D69/02 Download D69/02 (DOC) - English Download D69/02 (PDF) - English

s 12(1)(a) of the Inland Revenue Ordinance ('IRO') - whether medical expenses incurred in the course of producing income or for the purpose of producing income  

D72/02 Download D72/02 (DOC) - English Download D72/02 (PDF) - English

s 9(1) of the Inland Revenue Ordinance ('IRO') - whether expenses incurred in order to place the appellant in a position in which he was able to earn part of the assessable income or expenses incurred in the production of the assessable income - whether or not the bonus constitutes part of the appellant's income  

D81/02 Download D81/02 (DOC) - English Download D81/02 (PDF) - English

ss 8, 9 and 68(4) of the Inland Revenue Ordinance ('IRO') - whether or not the bonus was part of the remuneration payable and paid to the taxpayer under the employment agreement  

D74/02 Download D74/02 (DOC) - English Download D74/02 (PDF) - English

whether artificial transaction - whether contract of service - s 61 of the Inland Revenue Ordinance ('IRO') - whether delay in taking action by the Commissioner  

D86/02 Download D86/02 (DOC) - English Download D86/02 (PDF) - English

whether salaries tax chargeable - whether relationship between employer and employee existed - whether provision of service by self-employment - the relevant guidelines and fundamental test - necessary to consider all the objective facts, evidence and overall circumstances of the case - burden of proof on the appellant - ss 8, 12(1), 14 and 68(4) of the Inland Revenue Ordinance ('IRO'). [Decision in Chinese]  

D96/02 Download D96/02 (DOC) - Traditional Chinese Download D96/02 (PDF) - Traditional Chinese

whether salaries tax is chargeable on a sum paid as provident scheme contribution by an employer directly to the provider of an employee's personal pension account overseas - it is neither paid to the taxpayer as salary - nor at no time did the taxpayer have direct control of - ss 8(1), 9(1), 9(2A), 11B, 11D and 68(4) of the Inland Revenue Ordinance ('IRO')  

D89/02 Download D89/02 (DOC) - English Download D89/02 (PDF) - English

 

Note: The latest position of unsettled appeals is shown in either (a) Table of Appeals to Court of First Instance or (b) Table of Appeals to Court of Appeal/Court of Final Appeal. When the final outcome of an appeal is known, the position is set out in either table and will disappear in the next issue of Board of Review Decisions.

To view "Table of Appeals to Court of First Instance/Court of Appeal/Court of Final Appeal" (position as at 31.5.2003), please click here.

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