Tax alert - Issue 7, March 2012
In CIR v Li & Fung (Trading) Limited (CACV 86/2011), the Court of Appeal upheld the decision of the Court of First Instance (see Tax alert Issue 10 - April 2011), which found in favour of the taxpayer that the source of the commission income was outside of Hong Kong. The Court again declined to follow the Commissioner of Inland Revenue’s argument that the income of the taxpayer should be apportioned on the basis that the management and supervision of overseas affiliates, which were undertaken in Hong Kong, were key factors in producing the taxpayer's profits.
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