Clifford Chance

Chargeability of Profits Tax: Court of Appeal Affirms the Court of First Instance's Judgment in Aviation Fuel Supply Company

21 December 2012

The Court of Appeal (CA) has in its recent decision (CACV 150/2011, 4 December 2012) upheld the judgment of the Court of First Instance (CFI) in Aviation Fuel Supply Company v Commissioner of Inland Revenue  (HCIA 6/2009, 8 July 2011) which we have discussed in our client briefing issued on 26 July 2011. This case illustrates the importance of correctly characterising a taxpayer's business in determining whether profits tax is chargeable under section 14 of the Inland Revenue Ordinance (Cap. 112) (the IRO) and discusses the rarely-invoked sections 15(1)(m) and 15A of the IRO. The CA decision also illustrates how an imposition of a balancing charge by the Commissioner can be challenged.

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