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The profit from the rendering of services is from the place
those services are rendered.
The profit from the manufacture of goods is from the place
those goods were manufactured.
The profit from the letting of property arises where the
property is located.
The profit from the lending of money arises at the place
where the money is lent.
The profit from dealing in commodities has its source
where the contracts of purchase and sale are effected. CIR v.HK-TVB International Ltd. (1992) PC
HK-TVB made or acquired films or videos in
HK-TVB granted rights to TVBI (its 100% owned
HK subsidiary) to use the copyrights outside HK,
including the exclusive rights to sub-licence its
Sub-licence agreements signed both in HK &
Payments of the sub-licence fee was made in HK TVBI case
High Court and Privy Council: TVBI was a
HK-based co. carrying on business in HK, its
acquisition in HK of the rights from TVB-HK
to exhibit & sub-license films & programmes
to overseas customers were the most important
factors in the earning of the profits concerned.
Profits from sub-licensing arrangements were
held as taxable.
Court of Appeal: focus on the exploitation of
the rights outside HK not taxable TVBI case, PC
The proper approach is to ascertain:
– what were the operations which produced the
relevant profits &
– Where those operations took place. The relevant business of TVBI was the
exploitation of film rights exercisable
overseas & it was a business carried out in
HK Wardley Investments Services
(Hong Kong) Ltd (1992)
Facts: T managed investment portfolios for
It appointed overseas brokers to
purchase & sell shares & securities for
Commissions were payable by its clients
to overseas brokers
T received rebates...
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This document was uploaded on 03/23/2014.
- Spring '14