Tax - What is a profession?
"profession" is not defined in the Inland Revenue Ordinance. Because of
the wide meaning of "trade" and "business", the meaning of "profession"
is generally of little importance in so far profits tax is concerned. In
fact, this question seldom gives rise
to dispute because most professionals are keen to be recognized as such.
In general, people carrying on a profession are members of a professional
society such as accountants, doctors and lawyers. As far as profits
tax is concerned, the distinction between a profession and a trade or a
business is unimportant because they all are liable to tax on same
of profession was answered by the judge Scrutton LJ in the case CIR versus Maxse 12 TC 4,
61-62. Below is what the judge said:
question is what is a profession? I am
reluctantly finally to propound a comprehensive definition. A set of facts
not present to the mind of the judicial propounder, and not raised on the
case before him, may immediately arise to confound his proposition. But it
seems to me as at present advised that a profession in the present use of
language involves the idea of an occupation requiring either purely
intellectual skill, or of manual skill controlled, as in painting and
sculpture, or surgery, by the intellectual skill of the operation, as
distinguished from an occupation which is substantially the production or
sale or arrangements for the production or sale of commodities. The line
of demarcation may vary from time to time. The word “profession” used to
be confined to the three learned professions, the Church, Medicine and
Law. It has now, I think, a wider meaning. It appears to me clear that a
journalist whose contributions have any literary form, as distinguished
from a reporter, exercises a profession; and that the editor of a
periodical comes in the same category. It seems to me equally clear that
the proprietor of a newspaper or periodical, controlling the printing,
publishing and advertising, but not responsible for the selection of the
literary or artistic contents, does not exercise a “profession” but a
trade or business other than a profession."