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
- FACV9/2007
The Court held that although the transactions were genuine and satisfied ss 16 and 17, the introduction of the offshore vehicle (Strategic) and the circular borrowing had the effect of conferring a tax benefit (allowing larger interest deductions) and were entered into solely or predominantly to obtain that benefit; accordingly s.61A empowered the Commissioner to disallow interest deductions in respect of the excess borrowing for Hongkong International Terminals Ltd, but not to disallow deductions for Hit Finance Ltd beyond counteracting the tax benefit.