### Inland Revenue Ordinance 《稅務條例》

14ZY. Carrying out of activities in Hong Kong—qualifying ship broker
(1) For the purposes of section 14ZV(7)(a)(ii), an activity producing the assessable profits of a corporation that fall within section 14ZV(1) (as read together with section 14ZV(2)) for a year of assessment is not considered to be carried out in Hong Kong by the corporation, or arranged by the corporation to be carried out in Hong Kong, during the basis period for the year of assessment unless the prescribed requirements are met.
(2) To avoid doubt, the fact that the prescribed requirements are not met for the purposes of subsection (1) does not imply that the assessable profits mentioned in that subsection do not arise in, or are not derived from, Hong Kong.
(3) In this section—
prescribed requirements (訂明要求) means the requirements prescribed in section 13 of Schedule 17FB.

14ZZ. Losses sustained by qualifying ship broker
(1) Any loss sustained by a corporation from a qualifying ship broking activity in a year of assessment is, to the extent specified in subsection (2), not available for set off against any of its assessable profits for the year of assessment or any subsequent year of assessment if the activity is carried out—
(a) for its connected person that is a ship operator; and
(b) in respect of any activity carried out by the connected person in the operation of a ship.
(2) The extent specified for subsection (1) is the extent to which the activity mentioned in paragraph (b) of that subsection generates income—
(a) that is a sum falling within paragraph (a) or (b) of the definition of exempt sums

14ZZA. Anti-avoidance provisions relating to arm’s length principle—qualifying ship broker
(1) Subsection (2) applies if—
(a) conditions are made or imposed between a corporation that is a qualifying ship broker and a person who is an associate of the corporation, in their commercial or financial relations in connection with a qualifying ship broking activity; and
(b) the conditions differ from those that would be made or imposed if the person were not such an associate.
(2) Any profits that, but for the conditions referred to in subsection (1)(a), would have accrued to the corporation or the person and, by reason of those conditions, have not so accrued, are to be included in the profits of the corporation or the person and taxed in accordance with this Part.

### Inland Revenue Ordinance 《稅務條例》

14ZZB. Anti-avoidance provisions relating to arrangement to obtain tax benefit—qualifying ship broker
(1) If—
(a) a corporation that is a qualifying ship broker enters into an arrangement; and
(b) the Commissioner is satisfied that the main purpose, or one of the main purposes, of the corporation in entering into the arrangement is—
(i) to obtain a tax benefit (whether for the corporation or another person) in relation to a liability to pay profits tax under this Ordinance; or
(ii) to obtain a tax benefit (whether for the corporation or another person) under a tax treaty that is contrary to the purpose of the treaty,
section 14ZV(1) does not apply in relation to any assessable profits accrued to the corporation during a basis period relevant to the arrangement.
(2) For the purposes of this section, the basis period of a year of assessment is relevant to an arrangement if, in the Commissioner’s opinion, the arrangement has effect during that basis period.

14ZZC. Power to amend Part 4 of Schedule 17FB
The Commissioner may by order published in the Gazette amend Part 4 of Schedule 17FB.

### Inland Revenue Ordinance 《稅務條例》

15A. Transfer of right to receive income
(1) Subject to subsection (3) where—
(a) a right to receive income from property is transferred by a person to another person; and
(b) consideration has been received or is receivable in respect of the transfer,
the amount of the consideration shall, notwithstanding the exclusion relating to the sale of capital assets contained in section 14, be treated as a trading receipt arising in or derived from Hong Kong by the transferor from a trade, profession or business carried on in Hong Kong.
(2) The reference in subsection (1) to the amount of consideration shall, in the case where consideration is paid or given otherwise than in cash, be construed as a reference to the money value of the consideration.
(3) Subsection (1) shall not apply in relation to a transfer of a right to receive income from property where the right arose from the ownership by the transferor of a legal or equitable estate or interest in the property and, before or at the time of that transfer, the transferor also transferred that estate or interest to the transferee.
(4) In this section—
income (入息) means any profits, rent, interest or royalty chargeable to tax under Part 4;
property (財產) means any property whatsoever;
right to receive income from property (從財產收取入息的權利) means a right to have income that will or may be derived from property paid to, or applied or accumulated for the benefit of, the person owning the right.
(5) This section shall apply to any agreement made for the transfer of a right to receive income from property within the meaning of subsection (4) entered into or effected after 25 February 1987 other than an agreement made in pursuance of a legally enforceable obligation incurred on or before that date.
(Added 28 of 1987 s. 4. Amended E.R. 1 of 2012)

### Inland Revenue Ordinance 《稅務條例》

15C. Valuation of trading stock on cessation of business
Where a person ceases to carry on a trade or business in Hong Kong the trading stock of the trade or business at the date of cessation shall be valued for the purpose of computing the profits in respect of which that person is chargeable to tax under this Part as follows— (Amended 28 of 1964 s. 6; 26 of 1969 s. 12)
(a) in the case of any such trading stock—
(i) which is sold or transferred for valuable consideration to a person who carries on or intends to carry on a trade or business in Hong Kong; and
(ii) the cost whereof may be deducted by the purchaser as an expense in computing the profits from such trade or business in respect of which such purchaser is chargeable to tax under this Part,
the value thereof shall be taken to be the amount realized on the sale or the value of the consideration given for the transfer; (Amended 28 of 1964 s. 6)
(b) in the case of any other such trading stock, the value thereof shall be taken to be the amount which it would have realized if it had been sold in the open market at the date of cessation.
(Added 36 of 1955 s. 22. Amended 7 of 1986 s. 12)

15D. Post-cessation receipts and payments
(1) Where a person who has ceased to carry on a trade, profession or business in Hong Kong, receives any sum which, if it had been received before such cessation, would have been included in the profits of the trade, profession or business in respect of which the person is chargeable to tax under this Part, then to the extent to which the sum has not already been included in such profits that sum shall be deemed to be profits of the trade, profession or business for the year of assessment in which the cessation occurred.
(2) Where a person who has ceased to carry on a trade, profession or business in Hong Kong pays any sum which, if it had been paid before such cessation, would have been deductible in computing the profits of the trade, profession or business in respect of which the person is chargeable to tax under this Part, then to the extent to which the sum has not already been deducted in computing such profits, that sum shall be deducted in ascertaining his profits for the year of assessment in which the cessation occurred.
(Added 26 of 1969 s. 13. Amended 7 of 1986 s. 12)