INDOSUEZ W I CARR SECURITIES LTD v. COMMISSIONER OF INLAND REVENUE

HCIA5/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

INLAND REVENUE APPEAL NO. 5 OF 2001

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(Cases consolidated pursuant to Order by
Deputy High Court Judge Poon on 18th October 2001)

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R U L I N G

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1. Based on my ruling on the fifth question of law posed by the Board, Miss Li, on behalf of the Commissioner, invites me to remit to the Board of Review the issue of apportionment in respect of income derived from order from overseas clients.

2. Although my ruling of law on the fifth question was phrased so as to relate solely to commission earned from Hong Kong clients, it is clear that the question of law is the same whether the clients concerned were Hong Kong or overseas clients.

3. Mr Smith for the taxpayer accepts that as a matter of law the court can remit the question of apportionment insofar as commission earned from overseas clients is concerned, but he submits that it would be inappropriate to do so on the basis that the Board of Review could not properly come to the conclusion that any substantial part of the profits were derived from Hong Kong. I do not accept this submission which would be to prejudge issues which must be decided by the Board after reconsideration of the evidence.

4. I am satisfied that it would be appropriate to remit the case to the Board of Review for it to consider whether, in the light of its findings,it was appropriate to apportion profits derived from commission earned from overseas clients, and if so, to do so.