0220 B415F Profits tax - shipowning

0220 B415F Profits tax - shipowning - B415F Profits tax:...

Info iconThis preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
B415F Profits tax: Shipping and aircraft owning businesses 11
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Shipping and aircraft owning businesses n Major profits of shipping and aircraft owning businesses are derived from transporting goods and passengers to and from Hong Kong n Difficult in determining the locality of profits n IRO provisions governing shipping and aircraft businesses: 1. s23B – ship owners 2. s23C – resident aircraft owners 3. s23D – non-resident aircraft owners 22
Background image of page 2
1. Ship-owning businesses n S23B deals with ship owners carrying on businesses in HK. n No distinction between resident and non-resident owners. The following are deemed to be carrying on business in HK: 1. A ship-owning business which is normally controlled/ managed in HK (s23B(1)(a)); 2. A ship owner being a corporation incorporated in HK (s23B(1)(b)); or 3. Any other ship owner whose ships call at any location in HK waters (s23B(1)(2)). ¨ & CIR may disregard such calls if he considers that such calls are causal calls and further calls by ships of the same ship owner are unlikely (s23B(6)). S23B is not applicable to those cases. 33
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Ship-owning businesses n A ship-owner includes a person who charters a ship from another owner under a charter or agreement. n Both the owner and the charterer may be regarded as carrying on business in HK, ¨ but it does not include one who is only involved with dealing in ships or shipping agency business. 44
Background image of page 4
n For the business of dealing in ships, the source of income depends on where the contact of sale and purchase of the ship is effected and the IRD does not accept apportionment of the income. n For the business of shipping agency, the source of income depends on where the services of the agency are rendered and it is possible to apportion the income as partly onshore and partly offshore. Ship-owning businesses 55
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Shipping and aircraft owning businesses n Only the portion of their worldwide profits attributable in HK is taxable. n Assessable profit = n HK income x profit margin or HK income x worldwide profits worldwide income 66
Background image of page 6
n Assessable profits of a ship owner in HK (s23B(3)), = relevant sum x total shipping profits total shipping income 77
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
n If there are practical difficulties in applying the above formula and the assessor is of the opinion that the formula cannot be satisfactorily applied, the following formula will be used (s23B(4)): ¨ Assessable profits = fair percentage x relevant sums ¨ Ship owner can elect within 2 years after the end of the year of assessment to have the profits revised to those ascertained under s23B(3) (s23B(5)) 88
Background image of page 8
Total shipping income/ profits n Total shipping income is the worldwide income from the person’s ship owning business as shown in his commercial accounts n Shipping income includes government grants to subsidize shipping operations n Total shipping profits are the ship owner's worldwide profits from the ship-owning business, as presented in its accounts (section 23B(12)).
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 38

0220 B415F Profits tax - shipowning - B415F Profits tax:...

This preview shows document pages 1 - 10. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online