2012 Unit 5 Profit computation - s

A ower tax rate 4 qualifying debt instruments from the

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Unformatted text preview: ower tax rate. 4 Qualifying Debt Instruments From the YA 1996/97 onwards, profits tax From is charged at half the applicable tax rate on: the (a) Interest paid/payable on a qualifying debt instrument; & debt (b) Any gain/profit from the sale or Any gain/profit disposal or redemption on maturity or disposal the presentment of a qualifying debt instrument (s.14A). instrument 5 When Do Profits Become Assessable? S.14(1) charges profits arising in or derived S.14(1) from HK, not when the profit is received from In general, profit is assessed on an earning In basis, not when it is received (Issac Holden & basis not Sons Ltd v. CIR 12 TC 768). Sons 6 Ascertainment of Assessable Profits Generally accepted accounting principles are useful for calculating the assessable profit, subject to the provisions of the IRO. 7 Payment for Purchase of Property by Instalment ( ) by Where a taxpayer adopted the accounting practice of Where accounting Recognizing profits in its account when instalments were received, instalments Not at the time the sale and purchase contract time was entered into, Only those recognised profits arising in the year of Only assessment concerned are chargeable to profits tax (CIR v. Montana Lands L...
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