Departmental Interpretation and Practice Notes

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Departmental Interpretation and Practice Notes
Estate Duty Office Interpretation and Practice Notes
Stamp Office Interpretation and Practice Notes

Departmental Interpretation and Practice Notes
No.	Departmental Interpretation and Practice Notes	Date Issued
1.	Profits Tax Part A : Computing assessable profits Part B : Revenue recognition Part C : Measurement of inventories or stock	September 2020
2.	Profits tax Part A : Industrial building allowances Part B : Commercial buildings allowances	April 1999
3.	Profits tax - Apportionment of expenses	July 2008
4.	Lease premiums / Non-returnable deposits / Key or tea money / Construction fees etc.	February 2006
5.	Profits tax deductions for expenditure on - Technical education Building refurbishment Prescribed fixed assets Environmental protection facilities	April 2019
6.	Inland Revenue Ordinance - Provisions as to (A) Objections to the Commissioner (B) Appeals to the Board of Review (C) Appeals to the Courts	November 2016
7.	Machinery and plant - Depreciation allowances	August 2009
8.	Profits tax - Losses	September 2009
9.	Major deductible items under salaries tax	September 2006
10.	The charge to salaries tax	June 2007
11.	Field audit and investigation	October 2007
12.	Commissions, rebates and discounts	September 2001
13.	Profits tax - Taxation of interest received	December 2004
13A.	Profits tax - Deductibility of interest expense	December 2004
14.	Property tax	March 2011
15.	(A) Limitation of loss relief (Section 22B) (B) Leasing arrangements (Section 39E) (C) General anti-avoidance provision (Section 61) (D) General anti-avoidance provision (Section 61A) (E) Loss companies (Section 61B) (F) Ramsay principle (G) Penalty on tax avoidance cases (H) Guidelines on lease financing (I) Advance rulings	January 2006
16.	Salaries tax - Taxation of fringe benefits	October 2003
17.	The taxation of persons chargeable to profits tax on behalf of non-residents	January 2005
18.	Assessment of individuals under salaries tax and personal assessment	February 2020
19.	The agreement between the United States of America and Hong Kong in respect of the taxation of shipping profits	28 September 1989
20.	Mutual Funds, unit trust and similar investment schemes	June 2012
21.	Locality of profits	July 2012
22.	Taxation of royalties and other income from intellectual properties	August 2020
23.	Recognized retirement schemes	May 2019
24.	Profits tax - Service company "Type II" arrangements	July 2009
25.	Service company "Type I" arrangements - Salaries tax	November 2011
26.	Profits tax - Specified securities for the purposes of section 15E of the Inland Revenue Ordinance	June 2009
27.	Profits tax - Stock borrowing and lending	June 2010
28.	Profits tax : Deduction of foreign taxes	July 2019
29.	Tax relations between the Hong Kong Special Administrative Region and the People's Republic of China	August 1997
30.	Profits tax : Section 20AA Persons not treated as agents	September 2009
31.	Advance rulings	April 2020
32.	Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the avoidance of double taxation on income (Note 1)	October 2011
33.	Insurance agents	October 2009
34.	Exemption from profits tax (interest income) Order 1998	December 2004
35.	Concessionary deductions : Sections 26E and 26F Home loan interest	February 2020
36.	Concessionary deductions : Section 26D Elderly residential care expenses	February 2020
37.	Concessionary deductions : Section 26C Approved charitable donations	February 2020
38.	Salaries tax - Employee share-based benefits	March 2008
39.	Profits tax - Digital Economy, Electronic Commerce and Digital Assets	March 2020
40.	Profits tax - Prepaid or deferred revenue expenses	August 2010
41.	Salaries tax - Taxation of holiday journey benefits	August 2003
42.	Profits tax - Part A : Taxation on financial instruments Part B : Taxation of foreign exchange differences	June 2020
43.	Profits tax exemption for offshore funds (Note 3)	May 2016
44.	Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income	August 2008
45.	Relief from double taxation due to transfer pricing or profit reallocation adjustments (Note 2)	April 2009
46.	Transfer pricing guidelines - Methodologies and related issues (Note 2)	December 2009
47.	Exchange of information on request	July 2020
48.	Advance Pricing Arrangement	July 2020
49.	Profits tax deduction of capital expenditures on patent rights, rights to know-how and specified intellectual property rights	August 2020
50.	Taxation of specified alternative bond schemes	July 2014
51.	Profits Tax Exemption for Offshore Private Equity Funds (Note 3)	May 2016
52.	Taxation of Corporate Treasury Activity	September 2016
53.	Tax Treatment of Regulatory Capital Securities	August 2020
54.	Taxation of Aircraft Leasing Activities	June 2023
55.	Deduction for Research and Development Expenditure	April 2019
56.	Concessionary Deductions: Sections 26H to 26M Health Insurance Premiums	February 2020
57.	Concessionary Deductions: Sections 26N to 26U Annuity Premiums and MPF Voluntary Contributions	February 2020
58.	Transfer Pricing Documentation and Country-by-Country Reports	July 2019
59.	Transfer Pricing between Associated Persons	July 2019
60.	Attribution of Profits to Permanent Establishments in Hong Kong	July 2019
61.	Profits Tax Exemption for Funds	June 2020
6 2.	Taxation of Ship Leasing Activities	December 2020
63.	Part A : Qualifying amalgamation of companies Part B : Transfer or succession of specified assets without sale	November 2023

Note 1: The arrangement explained herein ceases to apply after the year of assessment 2006/07.

Note 2: Transactions between associated persons or non-Hong Kong resident persons’ permanent establishments in Hong Kong, to which the transfer pricing-related provisions in the Inland Revenue (Amendment) (No. 6) Ordinance 2018 do not apply, should be dealt with in accordance with Departmental Interpretation and Practice Notes Nos. 45 and 46.

Note 3: Tax exemption explained therein will only apply to non-resident persons or entities not falling within the meaning of “fund” under section 20AM for any year of assessment commencing on or after 1 April 2019.

Estate Duty Office Interpretation and Practice Notes
No.	Estate Duty Office Interpretation and Practice Notes	Date issued
1.	Controlled companies provisions under the Estate Duty Ordinance (Cap.111)	21 December 2000

Stamp Office Interpretation and Practice Notes
No.	Stamp Office Interpretation and Practice Notes	Date issued
1.	Stamping of agreements for sale and purchase of immovable property	November 2018
2.	Relief for stock borrowing and lending transactions	March 2023
3.	Deemed consideration under section 24 of the Stamp Duty Ordinance, Cap.117	September 1998
4.	Deemed sale and purchase under section 19(1E) of the Stamp Duty Ordinance, Cap.117	25 January 2000
5.	Special Stamp Duty	July 2014
6.	Alternative Bond Schemes	August 2014
7.	Buyer's Stamp Duty	July 2014
8.	Ad Valorem Stamp Duty	November 2018