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Loan interest income ▸ D7/84 O о O о The taxpayer was a HK FI and the subsidiary of a Tokyo head office. The source of the interest income from an offshore syndicated loans (R) was under dispute. Taxpayer's argument: the funds were made available outside HK and hence offshore BOR: Agree with the IRD that a distinction had to be drawn between "passive receipt" of interest and "carrying on the business of lending money" 。 The Taxpayer was actively lending and borrowing money and made use of modern technology and communication systems in its business 75 Loan interest income ▸ D7/84 • The taxpayer actively solicited business with a large no. of staff and decided whether to participate in the loan by assessing the credit and country risk O о Provision of credit is NOT the dominant and only factor in this case "Provision of credit" test is NOT applicable "Operation test” as laid down in Hong Kong Whampoa Dock Company case shall be applied 76 16

Loan interest income ▸ D7/84 O о O о The taxpayer was a HK FI and the subsidiary of a Tokyo head office. The source of the interest income from an offshore syndicated loans (R) was under dispute. Taxpayer's argument: the funds were made available outside HK and hence offshore BOR: Agree with the IRD that a distinction had to be drawn between "passive receipt" of interest and "carrying on the business of lending money" 。 The Taxpayer was actively lending and borrowing money and made use of modern technology and communication systems in its business 75 Loan interest income ▸ D7/84 • The taxpayer actively solicited business with a large no. of staff and decided whether to participate in the loan by assessing the credit and country risk O о Provision of credit is NOT the dominant and only factor in this case "Provision of credit" test is NOT applicable "Operation test” as laid down in Hong Kong Whampoa Dock Company case shall be applied 76 16

Question

It is talking about Hong Kong Tax, Special bussiness, calculating profit tax of Financial Instituition, please explain the following slides in a simplier way and with simple exmaple. 

Loan interest income ▸ D7/84 O о O о The taxpayer was a HK FI and the subsidiary of a Tokyo head office. The source of the interest income from an offshore syndicated loans (R) was under dispute. Taxpayer's argument: the funds were made available outside HK and hence offshore BOR: Agree with the IRD that a distinction had to be drawn between "passive receipt" of interest and "carrying on the business of lending money" 。 The Taxpayer was actively lending and borrowing money and made use of modern technology and communication systems in its business 75
Transcribed Image Text:Loan interest income ▸ D7/84 O о O о The taxpayer was a HK FI and the subsidiary of a Tokyo head office. The source of the interest income from an offshore syndicated loans (R) was under dispute. Taxpayer's argument: the funds were made available outside HK and hence offshore BOR: Agree with the IRD that a distinction had to be drawn between "passive receipt" of interest and "carrying on the business of lending money" 。 The Taxpayer was actively lending and borrowing money and made use of modern technology and communication systems in its business 75
Loan interest income ▸ D7/84 • The taxpayer actively solicited business with a large no. of staff and decided whether to participate in the loan by assessing the credit and country risk O о Provision of credit is NOT the dominant and only factor in this case "Provision of credit" test is NOT applicable "Operation test” as laid down in Hong Kong Whampoa Dock Company case shall be applied 76 16
Transcribed Image Text:Loan interest income ▸ D7/84 • The taxpayer actively solicited business with a large no. of staff and decided whether to participate in the loan by assessing the credit and country risk O о Provision of credit is NOT the dominant and only factor in this case "Provision of credit" test is NOT applicable "Operation test” as laid down in Hong Kong Whampoa Dock Company case shall be applied 76 16
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