Hong Kong Case Law: Decisions & Judgments

Topic

Source of profits

Legal area

Court

16 Mar 2026

CHAPMAN DEVELOPMENT LTD v. COMMISSIONER OF INLAND REVENUE

Citation

[2026] HKCA 436
Court

Court of Appeal
Case number

CACV450/2024

The Court dismissed the motion for leave: it held that on the facts and applying Datatronic and CG Lighting the production‑management operations under the Alternative Hypothesis would be ancillary/incidental to the Taxpayer's Hong Kong trading activities and therefore should be disregarded for source under s61A; the Board did not err in declining to infer an agreement by conduct on the evidence; the questions posed were not reasonably arguable matters of general or public importance covered by the Leave Questions and would not alter the outcome; costs of HKD 194,644 were awarded to the Commis…
30 Oct 2025

CHAPMAN DEVELOPMENT LTD v. COMMISSIONER OF INLAND REVENUE

Citation

[2025] HKCA 956
Court

Court of Appeal
Case number

CACV450/2024

The Court upheld the Board and trial judge: the taxpayer failed to discharge the evidential burden to prove an agreement to vary the written Management Agreement by conduct; the Management Fees payable under the written agreement were deductible but the Transaction was entered into for the sole or dominant purpose of obtaining a tax benefit within s.61A, and under the Alternative Hypothesis the production‑management activities would be ancillary to Hong Kong trading receipts and would not change the source of assessable profits; accordingly the appeal was dismissed.
29 Sept 2025

WISE PEARL LTD v. THE COMMISSIONER OF INLAND REVENUE

Citation

[2025] HKCA 596
Court

Court of Appeal
Case number

CAMP34/2024

The application for leave to appeal was dismissed because the proposed grounds did not raise questions of law but were challenges to the Board's factual findings (including sourcing of profits and timing/nature of property interests) which were supported by evidence; statutory and case law principles limit intervention to cases of legal error or perverse/no evidence, none of which were shown.
26 Mar 2025

SAMSUNG SDI (HONG KONG) LTD v. COMMISSIONER OF INLAND REVENUE

Citation

[2025] HKCFI 1282
Court

Court of First Instance
Case number

HCIA7/2022

The Court held there was no error of law in the Board's Decision: the Board was entitled to assess the evidence for sufficiency and reliability, to apply the statutory burden on the taxpayer, and to refuse the appellant's invited findings because the evidence was piecemeal, extrapolations were unreliable and the effective cause of the profits was not established as offshore; accordingly the appeal was dismissed.
29 Nov 2024

FOXCONN (FAR EAST) LTD v. COMMISSIONER OF INLAND REVENUE

Citation

[2024] HKCA 1111
Court

Court of Appeal
Case number

CAMP16/2024

Leave to appeal refused because the Board applied the correct legal tests and its adverse factual findings as to the Applicant's lack of substantive offshore manufacturing role and the Applicant's onshore middleman activities were open on the evidence; the Applicant failed to show its profits were derived offshore or that the challenged expenses were deductible; there was no established inordinate delay that would annul the assessments and the Board correctly declined to decide pure public law abuse claims (remedies for delay are judicial, e.g. mandamus).
17 Oct 2024

PATRICK COX ASIA LTD v. THE COMMISSIONER OF INLAND REVENUE

Citation

[2024] HKCA 944
Court

Court of Appeal
Case number

CACV357/2023

Upfront Payment was sourced in Hong Kong and was revenue (not capital); the Board erred in law by failing to attribute to PCAL the Japan‑based profit‑producing operations performed by BLBG on PCAL’s behalf in respect of the Royalties Income, so the Board’s conclusion that all Royalties Income arose in Hong Kong is set aside and remitted to the Board for determination (including possible apportionment).
30 Aug 2024

TOUAX CONTAINER INVESTMENT LTD v. THE COMMISSIONER OF INLAND REVENUE

Citation

[2024] HKCFI 2242
Court

Court of First Instance
Case number

HCIA1/2023

Ground 1 dismissed: Board did not err in finding that the taxpayer carried on a business in Hong Kong based on consistent use of the Hong Kong address and documentary evidence. Grounds 2–4 allowed: Board's reasoning on source of profits was insufficiently reasoned and relied on irrelevant or unclear inferences as to profit‑producing operations; matter remitted under s.69AA(1)(a)(ii) IRO to a freshly constituted three‑person Board for rehearing on whether trading and leasing profits were sourced in Hong Kong for the six years in issue.
8 Feb 2024

WISE PEARL LTD v. THE COMMISSIONER OF INLAND REVENUE

Citation

[2024] HKCFI 439
Court

Court of First Instance
Case number

HCIA5/2023

Leave to appeal refused and summons dismissed because the proposed grounds raised questions of fact or hypothetical issues rather than proper questions of law; the Board's findings that the appellant was a trader and that its profits were Hong Kong sourced were supported by evidence and not perverse; the appellant failed to prove it had the requisite 'relevant interest' in the Shenzhen Buildings for 2010/11 under applicable PRC law and so was not entitled to IBA for that year; no jurisdictional error by the Board in declining to bind the Commissioner to DIPN 21.
5 Jan 2024

FOXCONN (FAR EAST) LTD v. COMMISSIONER OF INLAND REVENUE

Citation

[2024] HKCFI 97
Court

Court of First Instance
Case number

HCIA3/2023

The application for leave was refused because the contested questions were predominantly challenges to the Board's factual findings rather than questions of law, Foxconn failed to show a reasonable prospect of success under section 69(3)(e), the Board's findings were not arguably perverse or unsupported by evidence, the deductions were matters of fact and evidential sufficiency, and the public law complaints lacked prospects given the failure on the substantive points.
19 Oct 2023

PATRICK COX ASIA LTD v. THE COMMISSIONER OF INLAND REVENUE

Citation

[2023] HKCFI 2676
Court

Court of First Instance
Case number

HCIA4/2023

The Board’s factual findings that the taxpayer conducted the licensing business in Hong Kong and that the profit‑producing acts (entering the Deed of Cooperation and granting sub‑licences) took place in Hong Kong were supported by evidence; accordingly the 40% royalties and the upfront payment were sourced in Hong Kong; the upfront payment was a revenue receipt received in the ordinary course of the taxpayer’s licensing business and not a capital sum, so the appeal is dismissed.