Hong Kong Case Law: Decisions & Judgments

Topic

Anti-avoidance

Legal area

Court

24 Jul 2009

NGAI LIK ELECTRONICS CO LTD v. THE COMMISSIONER OF INLAND REVENUE

Citation

NGAI LIK ELECTRONICS CO LTD v. THE COMMISSIONER OF INLAND REVENUE
Court

Court of Final Appeal
Case number

FACV29/2008

Court held that once irrelevant parts of the Board's 'Scheme' were stripped away a viable narrower scheme remained limited to the year-end intra-group price-fixing between Ngai Lik and Din Wai Electronics which could engage s61A, but s61A only applied to 1993/94-1995/96; however the Commissioner misused s61A(2) by assessing arbitrarily (treating 50% of offshore affiliates' manufacturing profits as Ngai Lik's) which did not rationally counteract the tax benefit, so the additional assessments (1991/92-1995/96) were annulled and the case remitted for properly founded fresh assessments for 1993/9…
4 Dec 2007

COMMISSIONER OF INLAND REVENUE v. HONGKONG INTERNATIONAL TERMINALS LTD

Citation

COMMISSIONER OF INLAND REVENUE v. HONGKONG INTERNATIONAL TERMINALS LTD
Court

Court of Final Appeal
Case number

FACV17/2007

The Court held that the introduction of Strategic and the circular borrowing were introduced for the sole or predominant purpose of obtaining a tax benefit by enabling larger interest deductions; accordingly the Commissioner was entitled under s.61A to counteract that tax benefit by disallowing interest deductions of HITL in excess of the net loan proceeds actually received by the group; the assessments on HITL were confirmed and the appeal against Finance was dismissed.
13 Feb 2007

HIT FINANCE LTD v. COMMISSIONER OF INLAND REVENUE

Citation

HIT FINANCE LTD v. COMMISSIONER OF INLAND REVENUE
Court

Court of First Instance
Case number

HCIA14/2005

The Board erred in law by finding that no real money was raised by the Strategic Notes and by treating the Strategic Notes as artificial and fictitious; on sustainable findings the Notes were legally effective and interest could be deductible under section 16, and the determinations under sections 61/61A require reconsideration by the Board with correct factual premise (remitted).
21 Jan 2002

CHEUNG WAH KEUNG v. THE COMMISSIONER OF INLAND REVENUE

Citation

CHEUNG WAH KEUNG v. THE COMMISSIONER OF INLAND REVENUE
Court

Court of First Instance
Case number

HCIA3/2001

The court held the Board did not commit an error of law: it applied sections 61 and 61A as alternative bases, gave sufficient factual basis for the additional assessments, and the Taxpayer failed to discharge the onus under s68(4); accordingly the appeal was dismissed with costs.

Hong Kong Case Law

NGAI LIK ELECTRONICS CO LTD v. THE COMMISSIONER OF INLAND REVENUE

COMMISSIONER OF INLAND REVENUE v. HONGKONG INTERNATIONAL TERMINALS LTD

HIT FINANCE LTD v. COMMISSIONER OF INLAND REVENUE

CHEUNG WAH KEUNG v. THE COMMISSIONER OF INLAND REVENUE