Hong Kong Ordinances

INLAND REVENUE ORDINANCE - SCHEDULE 10

[section 88A] PART I

ADVANCE RULINGS

1. On an application made by a person in accordance with this Part, the
Commissioner may make a ruling on how any provision of this Ordinance, other
than that relating to the imposition or remission of a penalty, the
correctness of a return or other information supplied by any person, the
prosecution of any person or the recovery of any debt owing by any person,
applies to the applicant or to the arrangement described in the application,
whether or not reference is made to that provision in the application. 

2. The Commissioner may decline to make a ruling if-

   (a)  the application seeking the ruling would require the Commissioner to
        determine or establish any question of fact;

   (b)  the Commissioner considers that the correctness of the ruling would
        depend on the making of assumptions, whether in respect of a future
        event or any other matter;

   (c)  the matter on which the ruling is sought is subject to an objection or
        appeal, whether in relation to the applicant or any other person; or

   (d)  the matter on which the ruling is sought is the subject of a return
        which has been or is due to be lodged under this Ordinance. 
		
3. The Commissioner shall not make a ruling if-

   (a)  the Commissioner considers that the arrangement in relation to which
        the ruling is sought is not seriously contemplated by the applicant;

   (b)  the application is frivolous or vexatious;

   (c)  the Commissioner is undertaking an audit on how any provision of this
        Ordinance applies to the applicant, or to an arrangement similar to
        the arrangement which is the subject of the application, during any
        period for which the proposed ruling would apply were the ruling to be
        made;

   (d)  the Commissioner considers that the applicant has not provided
        sufficient information in relation to the application; or

   (e)  the Commissioner considers that it would be unreasonable to make a
        ruling in view of the resources available to the Commissioner. 
		
4. The Commissioner shall, where he has declined to make a ruling under
section 2 or has not made a ruling by virtue of section 3, notify the
applicant in writing of his decision and the reasons therefor. 

5. Where the Commissioner has made a ruling to a person on the
application of any provision of this Ordinance in relation to an arrangement, and-

   (a)  the ruling applies in relation to the arrangement during the whole or
        any part of the period specified in the ruling; and

   (b)  the person has under section 15 disclosed in the return provided under
        this Ordinance that he has relied on the ruling in preparing and
        providing the return, the Commissioner shall apply the provision in
        relation to the person and the arrangement in respect of the whole of
        the period or the part of the period, as the case may be, in
        accordance with the ruling. 
		
6. A ruling shall apply in relation to an arrangement as a ruling on a provision of this Ordinance only if the
provision is expressly referred to in the ruling and only for the
period specified in the ruling. 

7. A ruling shall not apply in relation to an arrangement if-

   (a)  the arrangement is materially different from the arrangement
        identified in the ruling;

   (b)  there was a material omission or misrepresentation in, or in
        connection with, the application seeking the ruling; or

   (c)  any assumption of the Commissioner in respect of a future event or any
        other matter that is stated in the ruling is incorrect. 
		
8. An application for a ruling must-

   (a)  identify the applicant;

   (b)  disclose all relevant facts and documents relating to the arrangement
        in respect of which the ruling is sought;

   (c)  state the provision of this Ordinance in respect of which the ruling
        is sought;

   (d)  state the proposition of law (if any) which is relevant to the issues
        raised in the application;

   (e)  provide such other information as the Commissioner may specify in
        writing from time to time for the purposes of this section; and

   (f)  be accompanied by a draft ruling. 
   
9. The Commissioner may at any time
request further relevant information in respect of an application for
a ruling. 
		
10. Without prejudice to section 2, if the Commissioner
considers that the correctness of a ruling would depend on the making
of assumptions, whether in respect of a future event or any other
matter, the Commissioner may, subject to section 11, make any
assumption which he considers to be the most appropriate. 
		
11. The Commissioner may not make any assumption in respect of information
which the applicant can provide. 

12. A ruling made by the Commissioner must state-

   (a)  the name of the person, the provision of this Ordinance, and the
        arrangement to which the ruling applies;

   (b)  the period for which the ruling applies; and

   (c)  any material assumptions in respect of a future event or any other
        matter made by the Commissioner. 
		
13. The Commissioner may at any time
withdraw a ruling by notifying the person to whom the ruling applies
in writing of the withdrawal and the reasons therefor. 

14. If the Commissioner withdraws a ruling made in respect of an arrangement-

   (a)  the ruling shall cease to apply in relation to the arrangement if the
        arrangement is entered into or effected after the date of the
        withdrawal;

   (b)  if the arrangement has been entered into or effected on or before the
        date of the withdrawal-

        (i)    where the person to whom the ruling applies has under section 15 
			   disclosed in the return provided under this Ordinance that
               he has relied on the ruling in preparing and providing the
               return, the ruling shall after the date of the withdrawal
               continue to apply in relation to the arrangement for the
               remainder of the period specified in the ruling;

        (ii)   in any other case, the ruling shall cease to apply in relation
               to the arrangement. 
			   
15. Where-

   (a)  a person has obtained a ruling;

   (b)  the person is required to provide a return under this Ordinance; and

   (c)  in preparing the return the person is required to take into account
        the way in which a provision of this Ordinance applies to the
        arrangement identified in the ruling, the person must disclose in the
        return-

        (i)    the existence of the ruling;

        (ii)   whether or not the person has relied on the ruling in preparing
               and providing the return; and

        (iii)  any material changes to the arrangement identified in the
               ruling. 
			   
16. (a) If any provision of this Ordinance that is the
		subject of or affects a ruling is repealed, the ruling shall
		cease to apply to the extent of, and from the effective date
		of, that repeal.

   (b)  If any provision of this Ordinance that is the subject of a ruling is
        amended, or repealed in part only, so that the way in which the
        provision applies is altered, the ruling shall cease to apply to the
        extent of, and from the effective date of, the amendment or partial
        repeal.

PART II

FEES

1. The fees specified in respect of an application for a ruling made in
accordance with Part I are as follows-

   (a)  application fee-

        (i)    for a ruling on whether profits are to be treated as chargeable
               to profits tax under section 14 of this Ordinance as arising in
               or derived from Hong Kong $30000

        (ii)   for a ruling on whether remuneration is to be treated as
               chargeable to salaries tax by virtue of section 9A of this
               Ordinance $10000

        (iii)  for any other ruling $10000

   (b)  where the time spent in consideration of the application, including
        any time spent in consulting with the applicant, exceeds the time
        specified in section 3 for the type of rulings to which the ruling
        belongs, an additional fee calculated on the basis of each hour or any
        part thereof spent by-

        (i)    a Deputy Commissioner $1330

        (ii)   an Assistant Commissioner $1260

        (iii)  any other person appointed under this Ordinance $1000 
		
2. (a) In an application for a ruling made in accordance with Part I,
       reimbursement shall be made in respect of-

        (i)    any fees paid by the Commissioner to any person, as a result of
               the Commissioner requiring any external advice in relation to
               the ruling; and

        (ii)   any costs and reasonable disbursements incurred by the
               Commissioner in relation to the ruling.

   (b)  For the purposes of this Ordinance, the reimbursement required to be
        made under paragraph (a) shall, in addition to the fees specified in
        section 1, be regarded as the fees specified in respect of an
        application for a ruling made in accordance with Part I. 
3. The time specified for the purposes of section 1(b) is as follows-

   (a)  for a ruling on whether profits are to be treated as chargeable to
        profits tax under section 14 of this Ordinance as arising in or
        derived from Hong Kong 23 hours

   (b)  for a ruling on whether remuneration is to be treated as chargeable to
        salaries tax by virtue of section 9A of this Ordinance 11 hours

   (c)  for any other ruling 7 hours 
   
4. Where an application for a ruling is
withdrawn, the applicant is still liable to pay all the fees specified
in this Part and incurred in respect of the application before the
Commissioner receives notice of the withdrawal. (Added 32 of 1998 s.32)