CaseNoD38_06.doc

2006-07) VOLUME 21 INLAND REVENUE BOARD OF REVIEW DECISIONSCase No. D38/06Profits tax – referral fee – transaction to be disregarded – section 61 of the Inland Revenue Ordinance (‘IRO’). [Decision in Chinese]Panel: Michael Seto Chak Wah (chairman), Lam Wing Wo and Stephen Lau Man Lung.Date of hearing: 13 May 2004.Date of decision: 1 September 2006. The appellant companies were Companies A and C, both subsidiaries of Company D. By a written agreement between Companies D and B, they invested in Hong Kong properties. Company D would provide capital while both companies would share the gain or loss equally. Upon the recommendation of Company B, Company D through the appellant companies bought properties and resold them at profits. They paid referral fees to Company B. The Inland Revenue was of the opinion that the referral fees were artificial or fictitious and disregarded them. The shareholders and directors of Company D, the appellant companies and Company B were all closed relatives. Held:1. According to the written agreement, upon the sale of the properties, both parties had to pay the profits to each other within three months. Otherwise, the defaulting party had to pay interest. However, both appellant companies did not pay interest on the referral fees to Company B upon default.2. Large amount of the company records was not true.3. The Board found the written agreement was lack of defining who had the rights to make decision in buying and selling properties or when to sell.4. The Board found the appellant companies failed to prove the assessment on the referral fees was excessive or incorrect.Appeal dismissed.Cases referred to:Kum Hing Land Investment Co Ltd v Commissioner of Inland Revenue 1 HKTC 301Cheung Wah Keung v Commissioner of Inland Revenue [2002] 3 HKLD 773D77/99, IRBRD, vol 14, 528Seramco Superannuation Fund Trustees v Income Tax Commissioners [1977] AC 287Leung Wai Keung Richard Barrister-at-law for the taxpayer.Ngan Man Kuen and Lai Wing Man for the Commissioner of Inland Revenue.案件編號 D38/06利得稅 – 介紹費 – 不予理會的交易 – 《稅務條例》第61條委員會：司徒澤樺（主席）、林永和及劉文龍聆訊日期：2004年5月13日裁決日期：2006年9月1日 上訴人公司為A公司及C公司，均為D公司的子公司。

D公司與B公司簽訂協議書，投資香港的商業物業 D公司須提供所需資金，投資物業的利潤或損失，雙方平分 在經B公司的推介下，D公司以上訴人公司購買了物業並在出售後賺得利潤 上訴人公司向B公司支付介紹費 稅務局認為此些介紹費為虛假或虛構，並不理會 D公司、上訴人公司及B公司的股東及董事均為關係密切的親屬 裁決：1. 根據協議書，立約雙方須在完成出售物業後3個月內將一半利潤支付另一方，逾期未付者須支付利息 上訴人公司在逾期的情況下均沒向B公司支付介紹費的利息2. 大量的公司記錄並非真確3. 委員會認為協議書欠缺界定誰人有權決定購買、出售物業、或決定何時出售物業4. 委員會認為上訴人公司並不能證明此些介紹費的評稅是過多或不正確上訴駁回參考案例：Kum Hing Land Investment Co Ltd v Commissioner of Inland Revenue 1 HKTC 301Cheung Wah Keung v Commissioner of Inland Revenue [2002] 3 HKLD 773D77/99, IRBRD, vol 14, 528Seramco Superannuation Fund Trustees v Income Tax Commissioners [1977] AC 287梁偉強大律師代表上訴人出席聆訊。

顏文娟及黎詠文代表稅務局局長出席聆訊裁 決 書：1. A公司向稅務上訴委員會提出本上訴，聲稱在評定該公司2000/01課稅年度的應評稅利潤時，應該扣除該公司在該年度支付予B公司的Referral Fee (「介紹費」) 2,947,391元C公司向稅務上訴委員會提出本上訴，聲稱在評定該公司1999/2000及2000/01年度的應評稅利潤時，應該扣除該公司在該年度支付予B公司的介紹費2,138,573元兩項上訴同時聆訊2. 有關本上訴的事實在稅務局副局長決定書的第一部份「決定所據事實」中有所陳述，但A公司B1文件集第(2)(a)項事實應更正如下: A公司的法定股本及已發行股本分別為10,000元及2元A公司及C公司對於更正了的「決定所據事實」所陳述的事實並無爭議3. 本上訴所爭議的問題是: 稅務局副局長是否適當地應用《稅務條例》第61條的規定4. 《稅務條例》第61條規定:「凡評稅主任認為，導致或會導致任何人的應繳稅款減少的任何交易是虛假或虛構的，或認為任何產權處置事實上並無實行，則評稅主任可不理會該項交易或產權處置，而該名有關的人須據此而被評稅」有關《稅務條例》第61條的案例解釋包括Kum Hing Land Investment Co Ltd v Commissioner of Inland Revenue 1 HKTC 301, Cheung Wah Keung v Commissioner of Inland Revenue [2002] 3 HKLRD 773, 及稅務上訴委員會案例D77/99, IRBRD, vol 14, 528.在Cheung Wah Keung v Commissioner of Inland Revenue一案中，上訴法庭採納 Seramco Superannuation Fund Trustees v Income Tax Commissioners [1977] AC 287, Lord Diplock 的判詞:‘“Artificial” is an adjective which is in general use in the English language... Their Lordships will accordingly limit themselves to an examination of the shares agreement and the circumstances in which it was made and carried out, in order to see whether that particular transaction is properly described as “artificial” within the ordinary meaning of that word.’ (788頁，40段)在D77/99號個案中，稅務上訴委員會歸納了某些原則包括：我們必須檢視有關交易的所有情況，從而決定它是否「虛假」或「虛構」的。

‘All the circumstances of the particular transaction have to be examined in order to see if it is artificial or fictitious.’ (539頁，33段(c))一項交易不會因為參與者是相聯的而成為虛假‘A transaction is not artificial by reason of the fact that it is between related parties.’ (539頁，33段(d))一項交易不會因為該項交易是為了作出稅務安排而成為虛假‘A transaction is not artificial by reason of the fact that it is intended for tax planning purpose.’ (539頁，33段(e))但如果該項交易欠缺商業上的情理，並且除了為取得稅務上的利益之外，別無其他目的，那麼該項交易很可能稱得上是虛假的‘However if there is no commercial sense for the transaction and no purpose for the transaction other than for tax benefit, it may well fit the expression “a。