Profits Tax - Basis Period -
Where there is a change of accounting
date, at least one of the following must occur in a year of assessment:
there are two sets of accounts
ending within one year of assessment; or
accounts are not made up to the old
That year of
assessment is called the year of change.
In these situations, Section 18E of
Inland Revenue Ordinance empowers the Revenue to assess the profits for the
year of change and the year preceding the change on such basis as it thinks
fits. In practice, the Revenue is to assess as far as possible all the profits
throughout the business life on one hand; and to get the assessments on to the
new accounting date as soon as possible on the other.