№ files_lp_4_process_3_091714
Judicial record analyzing whether special annual bonuses paid to shareholders constituted deductible expenses or preferential dividends under Hong Kong profits tax law.
Year of decision: 2019
Jurisdiction: Hong Kong
Subject: Profits tax, special annual bonus, preferential dividends
Document type: Court decision / Tax appeal ruling
Panel members: Cissy K S Lam (chairman), Law Chung Ming Lewis, Richard Zimmern
Hearing dates: 23-24 May 2019
Decision date: 3 December 2019
Appellant: Company operating a funeral parlour
Legal provisions: Sections 16, 17, 68(4), (8), (9) and Part 1 of Schedule 5 of IRO (Chapter 112)
Relevant years: 2000/01–2011/12
Counsel for appellant: Caspar Ng
Counsel for Commissioner: Julian Lam
Key issues: Deductibility of special annual bonus, characterization as preferential dividends, expenses “in the production of profits”
Outcome: Appeal dismissed, costs of $25,000 imposed
Price: 8 / 10 USD
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