On 16 December 2016, the Hong Kong Inland Revenue Department published revised guidance on the profits tax consequences of a court-free amalgamation. The guidance covers:
The guidance also notes that if the Commissioner is satisfied that the court-free amalgamation is not carried out for the purpose of obtaining tax benefits, the anti-abuse provisions in Sections 61A or 61B of Chapter 112 of the Inland Revenue Ordinance will not be made applicable to the amalgamation, and the amalgamated company will generally be treated as far as possible as if it is the continuation of and the same person as the amalgamating company. Section 61A concerns the Commissioner's authority to counteract transactions where the sole or dominant purpose was to obtain a tax benefit, and Section 61B concerns the Commissioner's authority to disallow the setoff of losses where the sole or dominant purpose of a change in shareholding was to utilize a loss.
Click the following link for the full guidance.
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