Clifford Chance

Taxability of profits: the importance of correctly identifying what a person's trade or business consists of

26 July 2011

The recent Court of First Instance decision in Aviation Fuel Supply Company v Commissioner of Inland Revenue (HCIA 6/2009, 8 July 2011) illustrates how important it is in correctly identifying what a person's business consists of when determining the taxability of his or her profits under section 14 of the Inland Revenue Ordinance (Cap. 112) (the IRO). The decision also contains a useful discussion on the rarely-invoked sections 15(1)(m) and 15A of the IRO, which provide for the chargeability to profits tax in respect of the amount paid in return for the transfer of a right to receive income from property.

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