前稅局評稅主任楊輝洪 Qualifications

Raymond Yeung Tax Consultant former Assessor of Inland Revenue Department * Service charge $500/hr

飛鴻稅務顧問 收費每小時五百元

yeungfhr@yahoo.com.hk * Tel /WhatsApp /WeChat 94735846  

稅務課程 * 書刊下載 * 飛鴻文選 * 稅例解讀 * 報稅服務 * 稅務咨詢 * 記帳系統 * 網站首頁

 


Profits Tax - Expenditure for ceasing the business

In the case Basssett Enterprise versus Petty 21 TC 730, the company made certain payments to employees to release the company from their service agreements. It was held that such payments were not made “for the purpose of the trade” and hence not deductible. The court ruled that as these arrangements were part of an agreement for selling the majority of the company shares to a prospective purchaser, the expenditure was not made for the purpose of the trade, but in the interest of the purchaser.

However in the case CIR versus Swire Pacific Ltd. HKTC 1145, the wages paid to workers who went on strike to protest a merger was held to be deductible. Press here for more of the case. It should be noted that in the Swire case the payment was to enable the company to go on for some time before the cessation of business.   

In the case CIR v Cosmotron Manufacturing Co. Ltd. 4 HKTC 562, the Privy Council held that the severance paid in accordance with employment law on cessation of business is deductible.

Because of the different court judgments, it seems that the deductibility of cessation expenses is far from clear. In my opinion, if the amount in question is large, it is advisable to pursue the claim and seek professional advice.      

 

楊輝洪 Raymond Yeung 為你提供: * 飛鴻作品下載 * 寫好英文信件 * 基礎法律知識 * 實用稅務課程 * 英文速成課程 * 見工英語速成 * 中英文翻譯 * 中英文寫作服務 * 致稅局信件範本 * 飛鴻中文YouTube * 飛鴻英語YouTube * 稅務顧問服務

 

Tel/WhatsApp/WeChat :  94735846